I made the tyre machines but not any of the algorithms or original tyre sets. Everything was created using the tyres from Kunos cars and very occasionally what I would declare 'top tier' mod cars. The settings I use are the default settings with padding set at 50% as follows:
Back to your question, you're correct that you won't be able to generate a set of modern slicks for a DRM car due to the size difference. When creating for example the 'Medium Slicks Modern GT' set, if I remember correctly I ticked for the generator to use the Medium compound slick tyres from all the Kunos GT3, GTE and GT2 cars. The resulting tyre is a hybrid of these three types but due to the similar wheel and tyre size that these modern racing machines use, there isn't a lot of flexibility in the size for the generator to use.
To enable generation of a 'Medium Slicks Modern GT' set for a DRM car, I would go re-create the tyre machine, but this time I would add just one set of older tyres to the algorithm, so for example I might add the vintage slicks from the Kunos 1972 Porsche RSR or one of the tyre sets from one of the DRM revival cars. I'd then save this as 'Medium Slicks Modern GT X'. This would dramatically increase the possible size range that could be generated, but it would dilute the quality of the tyres slightly as now, let's say 5% of the final tyre properties would've been derived from 1970s slick tyres. This is why in my existing machines, there's an instruction to use for example ' Street -> Street X -> Street X-Treme ' in that order, as the quality of the tyre generated gets slightly less accurate as you add other tyres to the mix to increase the size range.
I should add that I'm speculating here, as with the majority of CM/CSP functions there's no user manual so I'm basing the above assumptions purely on the results of my own experiments. If it's unclear and you want additional machines added, I'm happy enough to create some more if you give me the parameters you're looking for, it only takes a couple of minutes per created set.
On the Guerilla/other encrypted stuff, I'm sorry but you won't change my mind on it. Anything encrypted goes straight in the bin out of principle, it goes totally against the spirit of this community and modding in general and if it becomes more widespread, all the knowledgeable/helpful people that offer advice and improvements on threads like this will slowly move on to other games and projects.