If anybody has a good definition of Severe Damage, I would like to see it.
"Severe Damage" is a euphemism applicable only to the simulator training dictating an expected response relative to securing the engine.
Any engine failure condition is subjective to what's really happening or about to happen internal to the engine, and very subjective for anybody but an engine expert to try and decode.
Many of the discussion points on the internet tend to get into this subjectivity to understand what and why you can or should choose between choices of actions.
In my view the "severe damage" checklist is a general action expected and as in most cases should be followed according to your training.