The wounds that creatures get from slashy/stabby/smashy weapons and body part attacks, as well as from ranged projectiles that were thrown/shot/fell/driven (minecarts), and even falling damage are all handled through a few common functions. Wrestling-related bendy/pinchy wounds are handled through different code that I haven't yet explored, so the comments below don't apply there.
The incoming attack always has a certain set of properties. Even the ground, at least in the arena, is a size 7290 object with a density of 2000, contact area of 100000, and no sharpness. The key property is the momentum of the attack, which is some variation on weight*velocity. The velocity is calculated differently for melee attacks, ranged attacks, falling, and new parabolic projectiles.
There is one set of defense calculations for use against edged attacks, and another set for use against blunt attacks. Both work on a "momentum cost" basis, but use the material property numbers differently. You can switch back and forth between them if layers are not cuttable, but can be smashed to make way for continued cutting. There is no difference at this stage between armor layers and tissue layers.
For edged defense, there is:
1. A small momentum cost to start denting the layer material, if the weapon has a higher shear yield than the layer.
2. A small momentum cost to start cutting the layer material, if the weapon has a higher shear fracture than the layer.
3. A large momentum cost to cut through the volume of the layer material, using the ratio of weapon to layer shear fractures and the weapon's sharpness.
For blunt defense, there is:
1. A check on the yielding of the weapon vs the attack momentum, to prevent soft meaty fists from punching bronze colossuses etc.
2. A momentum cost to dent the layer volume, using the layer's impact yield.
3. A momentum cost to initiate fracture in the layer volume, using the difference between the layer's impact fracture and impact yield.
4. A momentum cost to complete fracture in the layer volume, which is the same as step 3.
After a layer has been defeated via cutting or blunt fracture, the momentum is reset to the original minus a portion of the "yield" cost(s). If the layer was not defeated, reduced blunt damage is passed through to the layer below depending on layer strain/denting and flexibility.
All strains: lower is better. 50000+ causes automatic blunt pass-through.
All fractures: higher is better.
All shear yields: higher is better.
Max edge and quality => sharpness: higher is better.
Impact yields: debateable. Easily dentable but hard to fracture armor might be good. If the fracture is equal to the yield, it takes zero additional momentum to fracture the layer after denting.
The momentum costs are only for the volume of layer under the weapon, so having a small contact area allows you to cut deeper and so on. Severing only occurs when all the CONNECTS tissue on a body part is completely cut/fractured. Due to the blunt bypass, normally the skin/fat/muscle on organic creatures will prevent blunt attacks from severing body parts. If you mod out their connectivity or lower their strain values, it becomes possible to sever parts by breaking the bones.