In arcade, the damage does not affect the behaviour of the plane so much. It is almost: either he is dead, or he is alive and very much kicking.
Most of the 'strange' things you describe are explained with one word; 'arcade'.
A plane flying at 20km/h is not possible no, but in arcade, stalling is near impossible, thats why it still 'flies' at 20km/h.
try playing on realistic online, or just try it out in single player. I think you will see most of your problems will disappear right away
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