Mario Kart 64 cheated a lot but it wasn’t almost completely impossible to get back in the lead if you messed up on the higher difficulties.
The way I always noticed the computer cheating on this game, even as a kid, is if you hit a computer with a shell and they are off screen they don’t actually take the hit. They just sort of “brake” for a second. You can catch them doing this if they are just barely off screen. I’m sure this was to save cpu, but they could have at least made them stop for the appropriate amount of time.