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At the end of Last of the Time Lords, the Titanic crashes into the TARDIS. In the next episode it's pushed back out as the huge hole it made is repaired.
Since the TARDIS used Time Lord technology to make the huge interior fit inside the small Police Box, considering how large the Titanic's bow is in comparison to the outside of the TARDIS, how would it look from the outside when something large like the Titanic smashes into the TARDIS?
We've never seen such a thing from the outside.
Trans-dimensional engineering is --like most explanations on the show-- complicated and inconsistent. The First Doctor explains it by comparing the phenomenon to showing a large building on a television in small sitting room, while the Fourth Doctor describes trans-dimensional engineering as a kind of forced perspective.
Since we have no visuals for such a collision, and no consistent intelligible explanation for what trans-dimensional engineering actually is, we don't know and can't really extrapolate what it'll look like.
The Tardis isn't really bigger on the inside. Its interier is in a pocket universe and the exo shell or exterior is in our universe and the two are connected via a dimensional threshold (basically a portal). When the Tardis re mats around a object or person that object is moved into the primary control room so when the Tardis’ shields were deactivated the Titanic went through the threshold and the bow was moved into the poket dimension but since it was breaking through the exterior it broke through the wall when it was moved into the interior.
