In races greater than 10% distance, during a race you must use both of the dry tire compounds or risk disqualification.
Tire Simulation
Turning on Tire Simulation enhances your gameplay experience by allowing your tires to wear, blister and puncture.
You will also experience changes in grip level when driving on different surfaces. Picking up marbles, small pieces of rubber which has been shed from car tires, or gravel will cause you to suffer a loss of grip until they can be worn off.
Logic would suggest that turning it off would give you the opposite of turning it on.
So, no tyre wear, blisters or punctures.
... they must have been in a big rush to get the game on the shelves...