While calculating material strength in real time is probably not possible, nothing stops you from auto generating those deformation weights using a lot of simulation time while the game is in development.
So you're saying they would create the model assets, and then do physical calculations on each component of the model, then bake those weights into the model? It sounds somewhat plausible.
My gut tells me they manually place soft body joints and then paint the weights for the models. It seems like that would be easier to maintain and more predictable for the deformations that they expect to see.
For example, you and I know how the front of a truck "should" look if half of it gets crunched in, but that deformation is because of an engine, the body, lots of metal/plastic components, etc. Obviously it's not yet realistic to model every single component of a truck, and perform a physical simulation "baking" step, so that the truck crunches in that way in the game. They have to fudge that kind of crunch...so it makes me think they're manually rigging the softbodies.
