It's up to the AHJ to make the call. The term is used to express that some methods and materials offer better protection against physical damage, and that those methods and materials should be preferred when there's potential for greater than normal physical damage.
I'd suspect you wouldn't encounter severe physical damage in residential settings often, though it may be more common in industrial settings where there is equipment and machinery moving hither and thither.
After further research, it appears the term was approved at some unknown time. It was possibly written in as part of the original proposal for an article, and then propagated as similar articles were proposed.
There have been proposals to apply the term to other areas of the code. Though as far as I can tell, all such proposals have been rejected. The outcome of one such proposal can be found in this document, where the submitter proposes a revision to 330.12(1) to include the term.
The uses not permitted section of Article 330 should acknowledge the protection against physical
damage provided by the metallic covering of this wiring method by limiting the cable from use where it is subject to
severe physical damage (such as forklift or vehicular damage). The degree or magnitude of physical damage depends
on the wiring type and the likelihood that damage prior to or after installation could severely damage or cause the wire to
be inoperable. Type MC Cables have a metallic covering which provides protection to the inner insulated and
non-insulated conductors against physical damage before, during, and after installation.
While the term “severe physical damage” in not defined in the NEC and thus requires evaluation by the AHJ, the
phrase is used to qualify the suitability of several wiring methods including in 358.12 for EMT, in 368.12 for busways, in
370.7 for cablebus fittings, in 376.12 for metal wireways, in 380.12 for multioutlet assembly, in 386.12 for surface metal
raceway, in 388.12 for surface nonmetallic raceway and in 392.12 for cable trays.
A comment from one of the folks who voted to reject the proposal, basically points out that the term only currently applies to raceways and wireways not cables.
... The submitter’s comparison to articles 358, 368,370, 376, 380, 386,
388, and 392 all include wiring methods or systems that are unique from that of cable either by virtue of limited use or
they are metal raceways or wireway. Cables introduce a significant degree of flexibility in the manner and location that
they are routed and the proliferation of their use within the industry.
Everybody involved agrees that the term is undefined, subjective, and the final determination as to if it's "severe" physical damage is left up to the AHJ.
ecmag.com's interpretation of 314.16(B)(1) Conductor Fill:
There is an exception under the conductor-fill provision that pertains to luminaire (fixture) conductors. An equipment-grounding conductor or four or fewer luminaire (fixture) wires smaller than 14 AWG, or both, entering a box from a domed luminaire (fixture) or similar canopy and terminating within that box, can be omitted from box-fill calculations. Under certain conditions, up to four luminaire (fixture) conductors and one equipment-grounding conductor can be installed but not counted in the box-fill calculation. The conductors must be 16 AWG or smaller and must enter the box from a domed luminaire (fixture) or similar canopy.
I always wondered why the wires on lights are so flimsy; that's why, so you don't have to count them in box fills.
Best Answer
Browsable = No.
I prefer paper books when there's a likelihood of being able to stumble across interesting things by luck or accident. Open it to a page, read what's there, wow, that might be useful, or didn't know that.
NEC is utterly opaque in that manner. If you open to a random page you will find a bunch of gobbledygook. Even if you understand it, it'll be misleading because it doesn't apply to your situation, it applies to solar panels... or gantry cranes... or 1200V installations in factories... or whatever. You'll have to backtrack through the section to see what the find was even applicable to. And then you'll find it's nothing you'll ever do.
Searchable = Yes, please!
However, being able to do text or phrase searches on NEC is indispensable. If you know the phrase you need, type it in and see what references that phrase. For instance one of my favorite queries is
15 or 20which exists exactly one place in NEC - a table I use a lot.You can see what other points in Code reference a Code section.
It's super usable that way.
So paper = no thanks
As you know, paper lends itself to bathroom browsing, and very much opposes searching. So I wouldn't find it all that useful.
Recommendation
Start with a DIY book that "speaks your language", which you find by gearing up with PPE and browsing the library at home stores (which still have one) or actual municipal libraries (being wary of obscenely out-of-date or foreign books; ours has a British one for Pete's sake). Find one you like, mail-order it. Nothing electrical should ever be bought from Amazon, with the exception of books.
Obviously, you would choose a book that is calibrated to the type of work you are doing (e.g. home improvement not oil-rig wiring). Such books are, as a rule, quite browsable.
Then, rely on Internet pages and platforms like StackExchange for gory-detail questions that go beyond the book.
Then, a competent electrical supply house for consultation on necessary parts and the like (e.g. what kind of cable clamp can bring 4 Romex into a 1" knockout).
Then, some searchable version of Code for Code refs. I use a PDF, but we can't talk about how to obtain one of those.