The way CASE works from my understanding, is that its basically a failsafe for the CT. It will not prevent your side torso from disintegrating by an ammo explosion. If the ammo i n the leg were to expload, it would destroy the leg (internal structure - total damage of stored rounds), where the leftover will be sent off to the side torso, 75% of it. Same formula happens.
Now this is where CASE comes into play. Instead of sending the remaining damage to the CT, it vents it straight out of the chassis, negating the risk of dying from an event. This is useful for brawling mechs, or LRM boats with ammo everywhere. Indeed you will lose half a mech, but it's better than nothing.
Now to your question. No, CASE will not do its job if the torso it was housed in is destroyed. This is simple logic. If you lose a torso, you lose everything in it. The ammo explosion from the leg will simply be redirected to the CT, but at a 50% reduction because of how damage is transffered through destroyed components.
Edited by TuntematonSika, 27 October 2014 - 02:39 PM.