Will a war engine transport be broken by blast markers equal to its defence capacity (DC) value without reference to passengers, from another formation, that it is carrying? The war-engine has come under fire and recieved enough BMs to break it. Notes:

(a) If the passengers are part of the same formation as the war engine then they will be included.
(b) If the war engine is undertaking an engage action or a move and shoot action the war engine and passengers are considered one formation for the duration of the action, although blast markers are awarded to the individual component formations.
(c) A broken formation in a war engine does count during assault resolution.

I think the answer is no. The passengers are ignored for BM purposes aside from during the shooting or assaulting war engine activations or when the war engine is being assaulted.

Correct. A WE can be broken while carrying another unbroken formation. You don't count units from another formation being transported as part of the WE's formation.

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Dave

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Squats 2019-10-17

One other thought to remember is that when the transport becomes broken, any troops it is carrying may disembark at the end of it's Withdrawal moves.