Early days of automobile racing or not, given Fate's penchant for cheating, there might have been an investigation or at the very least suspicion as to the ones responsible which could've led to their disqualification. Max's act of self-sabotage, namely one of the car's two engines falling out, may have actually help draw such suspicion away.
The board were at first skeptical at Leslie's proposal of building a car for a long distance race. That is, until Fate tries to derail the thing only for him to be exposed and boast that he'll build the greatest automobile in the world and win. With the gauntlet thrown (down a manhole by accident), Webber accepts the challenge.
Any car enthusiast knows that touching someone else's car without permission is a no-no, and it's especially rude to be eating while leaning over one. So, Fate's popping the balloon was his way of getting that kid to knock it off and move away.
Admittedly, it was a funny Poke the Poodle moment too.