Physics object overlapping collision capsule flies away violently

I have a system where you can pick up and move physics objects. While this happens the player collision capsule is iognored while you have the physics item held. But when you release it, and it still is overlapping the collision capsule, the physics objects flies off and behaves un-naturally. How can i have the overlapping objects not behave like this? ive tried CCD, solver iteration counts, and a slight delay on the collision channel response doesnt work either. Basically i want the objects to gently overlap, but when you let go of the object and the collision channel is blocked, i dont want the physics object to enter orbit!!