The damage-to-disarm rule is talked about in the PAWS adaptation of the Bladeturning spell.
The classic spell was a resistable effect which caused a paired effect of "crushing instead of cutting" and a subsequently Unready weapon.
The sorcery application is different: "crushing instead of cutting" ALWAYS happens, and instead of a resistable contest, it instead uses Reflection, Variant on Damage Resistance (limited with Provides no DR and Only to disarm, not break to reflect damage back against cutting weapons (not their users).
What this rule does is create a situation of a one-sided ST roll which is penalized by the Basic Damage rolled by an attack.
The rule is an attempt to unify B401's Disarming rules with the Gun-Fu rules on page 11 called Ranged Disarms.
The difference there is Ranged Disarm usually used a basis of "Piercing" damage, whereas in this case the DR is reflecting Cutting Damage which is transformed into Crushing Damage as a special effect of applying Damage Reduction to it.