Okay so some further investigation on this issue. If I drag the mouse slowly enough, I can actually massively modify the rotation of the object without getting a ‘full update’ of the mesh (and camera). I don’t understand why the aim location works just fine (which is determined from bone rotation on the mesh), but the mesh doesn’t follow when the transform updates are so small. Again when PhysX is used on the mesh, this isn’t a problem.
The only other possible problem area is here: USceneComponent::UpdateComponentToWorldWithParent (Lines 424 > 435).
I’m going to try and call ‘PropagateTransformUpdate(true)’ on tick, and see if this resolves the precision issue.