There is an option called Ragdoll in the game options menu but I can not enable it, it says "off" and I can not adjust the toggle to "on". Screenshot attached. Any help?

Same problem here !
Edit : In fact, I have ragdoll enabled, but the same problem that you describe. And so, I can't disable ragdoll ! It's on "off" in the option, you can't change it, but it's activated when you play.

I have experienced the same phenomenon. Although ragdoll is disabled in the option menu, it is definitely enabled in the game. Strange thing is I also downloaded the Steam version and the ragdoll option does not even appear in that version.

I can't change ragdoll setting either, but ragdoll is enabled.
I wonder what disabling it should do? I can't think anything else that the driver wouldn't fly out of the car at all.

There is a workaround for this issue.

main page for Flatout 1 on pcgamingwiki
https://www.pcgamingwiki.com/wiki/FlatOut

workaround link listed on main page
https://community.pcgamingwiki.com/files/file/1023-flatout-wrong-version-fix-gogsteam/