An engineering assessment of the stage separation fault is reported for two-stage, vertically stacked space vehicle. The analysis combines explicit modeling of the fault evolution failure with analytical estimations based on simplifie physics-of-failure models. The following sequence of events is analyzed: (i) structural dynamics of the nozzle extension during the impact; (ii) yielding and burning through the damaged nozzle under the plume loading during engine start up; and (iii) reduction of the actual thrust and side load in the quasi-steady burning regime. The analysis reveals characteristic time-signatures of the impact-induced torque and lay down foundation for the development of a diagnosis and prognosis system for the stage separation fault.