What exactly is the difference between the Flooded tank
and the Damaged tank.
1) The FLOODED tank type is simply the classical way of treating
a flooded condition: the waterplane inside the tank is coincident
with the waterplane outside the tank. However, the most common terminology
(at least in the USA) is to call such an analysis using this mode
"damage stability analysis".
2) The DAMAGED tank type is much more complicated. It behaves the
same as a flooded tank (assuming the contents is set to sea water)
only when the tank's reference point is under water. If its reference
point is above water and its internal contents waterplane is below
the reference point it behaves as an ordinary intact tank. If its
reference point is above the water and its internal contents waterplane
would be above the reference point, it is in a spilling mode.