I'm on my phone and going by memory here, but physics in ED went something like this:
At first, the game was supposed to be fully Newtonian (sic), but the flight controls on ships rigged to make them handle like ww2 fighters.
You have flight assist off mode which allows you to pull fancy manoeuvres still, like flipping 180 degrees and shooting your pursuers. That used to be "Newtonian" mode. Regular flight used the same physics, but the output on your vectored thrusters was throttled to give the impression of atmospheric flight with "flight assist".
The vectored thrust nozzles could be damaged individually on a ship, which would drastically impact its handling. No idea if this is still possible. Someone will have to test. But it was in the beta and the engine supports it.
At some point during early testing, it was doing out that combat with flight assist off devolved into one of two styles, neither of which was deemed very fun. Most players would either sit still like a turret and rapidly turn to face enemies, or they would "joust" by flying past someone at very high speed, then taking agrees to turn a around and get back.
That was the reason they added absolute speed and rotation limits. The physics engine was gutted as a result, but we got ships that handled the way Braben said he was aiming for, even if they are less realistic.
Relativistic speeds aren't fun for space fighters. You will spend most of the time several kilometres apart and a targeting computer will shoot at targets or of visual range for you. I tried doing some orbital combat in ksp and its just not very fun outside the first novel minutes. First stop the allegers brigade from pretending it would be awesome of course. Since noone will ever make the game they want, noone can ever prove them wrong
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Remember kids: Cool kids fly with flight assist off!