I must add a note; the brilliance of the current collision implementation is in its insane simplicity and thus ability to cause dis-belief as to the possibilities of its internal workings. So if one overthinks the system and tries to "game" or understand it with brute complexity they usually wont get far.
An example: Back in the *Warbirds* days, simply looking *behind* you alot of the time before the moment of impact, would prevent you suffering from the penalty of it and the other person would usually die as a result.
I can't say AH works the same way, but im sure its a basic extension of the idea that *Only what you see is real* and your FE is always a subjective machine that negotiates with the collective of subjective machines around you to come up with the *truth* of the situation, very much like human beings do.
If AH were to simulate everything server side, there would probably be *too* many collisions and everyone would be really angry, its the relativity of the core design that allows for the general acceptance of its existance. To say, "We all see what we want to see" and it pretty much gives us that due sense of satisfaction.