Yea, well that is a bit misleading then with constrain rotation but even with constrain rotation enabled it does not constraint it as much as I need it that is why I also use set rotation on top. The problem with set rotation on a physics objects is that collisions can become really jittery.
The problem with the lagging is also that is heavily related to performance, with great performance it is lagging behind only slightly while with bad performance it lags behind a lot. Either delta time has not been taken in account somewhere in the source of the Physics handle or the “set target location” system is just problematic in any case.
I already tried turn up all the settings to get the rotation rigid, I would need those values to get up much higher I guess. Interpolation Speed is already clamped at 100. My game is basically made around boxes in a grid, similiar to minecraft, you can grab cluster of boxes, move them around and when let go they go to back in the grid. Any rotation feels awkward. Even with “set rotation” every tick it can still rotate a little off and there is the jittery collision problem which gets worse the further the target location is from the actual grabbed box location because it tries to force it more and more through any collision.
Disabling physics simulation and attaching it is beside the point. Attached objects just move through any collision. You also have to take in account that this is VR. There is no way to force the players hands in a location when they are blocked in game. I think something specifically made for VR motion controller physics interaction (grabbing and pushing) would be great. Something that feels tight, that can handle physics collision well, with it being not a problem when player hands go through stuff and some good rumble feedback and of course performance is a concern in VR. Well, I can say so much that it is very tricky would be cool if you the experts at Epic could cook something up specially for that.