http://www.cyclehelmets.org/1209.html
It's not surprising that people who've been through a crash on their bike and escaped serious consequences but found helmet damage often believe strongly that the helmet has “saved their life”. However, the number of helmet users with this experience seems very much greater than the number of bare-headed cyclists who ever suffer a head injury. This suggests that the reality might not be so straightforward.
How cycle helmets work
The principal protection mechanism in a cycle helmet is the polystyrene foam, or styrofoam, that covers the head. When this receives a direct impact force, the styrofoam is intended to compress and in this way spread and reduce the force that is passed onto the skull, thus reducing linear accleration of the brain.
However,
it is common for helmets to break without the polystyrene foam compressing at all. A major helmet manufacturer collected damaged childrens' helmets for investigation over several months. According to their senior engineer, in that time they did not see any helmet showing signs of crushing on the inside (Sundahl, 199. Helmet foam does not 'rebound' after compression to any significant extent. If the styrofoam does not compress, it cannot reduce linear acceleration of the brain. The most protection that it can give to the wearer is to prevent focal damage of the skull and prevent minor wounds to the scalp. It is not likely to prevent serious brain injury.
[picture]This helmet has split along the ventilation slots, which is common. However, the thickness of the styrofoam has not been compressed.
It most likely gave no more than superficial protection.
Some dissipation of impact force might occur from the action of a helmet breaking, but in most cases this is likely to be small. Helmet standards require the foam to start to compress at a level of force less than that which might be expected to lead to brain injury. While it is known that many helmets do not actually meet the standards to which they are supposed to be accredited (BHRF, 1081), it follows that if the styrofoam does not compress at all, the direct linear force on the helmet was minimal and it's quite possible that the cyclist would not have received any injury if the helmet had not been worn.