Essentially its because the mesh gets triangulated on import.
if you triangulate the mesh within blender you can see the same effect happen in blender (2.8) to a lesser degree.
The lesser degree comes down to the shadowing/render engine.
the best suggestion I have is to triangulate the mesh with a triangulate modifier so that it’s not done by the engine import, but by the FBX export (when you click apply modifiers checkbox).
If you give it a couple of days we should get a stable 2.8 release. That will probably help some as you’ll be able to use my plugin for exporting/importing and it simplifies your life a little bit.
Regarding the flatten. You need to work it loop by loop.
it basically makes the loop flat by mathematically averaging whatever size it needs to.
yes, an arm isn’t flat per-se. But you can flatten the 3 or 4 loops around the problem area and with the all selected you can rotate them back to being in line with the rest of the mesh.
it will remove the twitch you have in there.