Object doesn't rotate around its pivot in Sequencer

I’m having the same issue in 4.26
I’ve tried unchecking “Record in World Space” and “Remove Root Animation”
I’ve tried combinations of these.
I’ve tried the take recorder, but I get the same rotated and shifted results.

In attempts to correct these rotations, I’ve added another transform track in sequencer and oriented the mesh so the animation looks correct. However, the mesh now pivots at a different point and moves in arcs as the OP mentioned.

You can see in the capsule component, how the mesh is shifted.

After Unreal has demonstrated the power and merits of sequencer and high quality render queue, it’s frustrating to find that I can’t record physics based, user input, or procedurally generated animations in my project.

The example I’m including is simple character movement without animations to simplify and illustrate the transform issue.

[demonstration of viewport sim and sequencer recording][1]