I doubt it scales with the exact durability, but it probably does scale between Damaged (yellow) and Heavily Damaged (red). I don't know quite how it affects stats. Last time one of my rings hit yellow it gave the exact same stats it did when it was 100%, but since the icon was annoying I went ahead and repaired it instead of letting it hit red to see what happens.
Gear with higher stats might start losing their effectiveness at yellow damage, but I haven't been assed enough to test it yet.
Naiya | Mithra | Windurst | Rank 10 | 1st Lieutenant | Ragnarok
WAR: 75 MNK: 75 SAM: 66
RotZ: O | CoP: O | ToAU: O | Apoch Nigh: O
Naiyah | B.Elf | 85 Rogue | Stormscale
Doubleday | B.Elf | 85 Paladin | Stormscale