The reason the camera snaps up and down is because it’s attached to the head, which instantly snaps into place with the rest of the character as you can see in the alternate view camera.
You can maybe alleviate that issue by using camera lag (bad idea for first person camera)… But the right way to do it would be to just smooth out the animation properly. E.g. if you fix the problem of your character teleporting downwards, you will fix the issue of the camera snapping too.
If I were to hazard a guess about why your character sinks into the ground like that, it’d be that your crouching animation/pose is somehow what’s causing it. Seeing as you can still move and don’t fall through the level, your collision capsule is where it’s supposed to be, only your mesh is moving out of position, which is typical for animation issues, not a 100% on how to actually fix that but I thought I’d at least point you in that direction.