Alright ! I got great news. You guys resolved the issue in 4.8.0!!!
Now it makes some of my testing more accurate. I just tested on a level w/ a StaticMesh floor and it didn’t seem to go back 'n forth this time and also tested w/ a Landscape and a BSP. The BSP test failed as expected and stayed false, the SM was true and didn’t flip flop as well as the Landscape.
Awesome job! Maybe while looking for the issue, one of the devs made some code changes but it’s definitely not doing the same thing anymore. 
As far as the trace that seems to jump around, on the custom character I have some code to make him strafe using the current animation and I think (since the trace is based on characters position), it is causing some of that since the anim seems to be a little jittery as well.
We have an animator on this project who is getting a new Hero Character ready to be brought into the editor so after we pass that phase, and if we run into anything in particular, then I’ll reach out to the Support Staff and check in.
But cross this one off the books, great job to you and the team!