Seems to be completely related to Performance. I checked my frame timing in Steam VR and noticed that while I wasn’t “Dropping Frames” my GPU was nearly fully utilized. I stripped and stripped until I had some GPU overhead and the jitter on the controllers disappeared.
There must be some time warp feature that is hiding the jitter on head rotation. Not sure why performance suddenly dipped so dramatically for me, even basic scenes are using almost all of my GPU currently.
To see if this is the case for you; Open “SteamVR beta”, load and run your UE4 content, Enter the SteamVR Settings menu, select the Performance tab, then click “Display Frame Timing”.
That should get you a pop-up screen like this:
Get your GPU down like I have (by hiding/deleting/disabling anything you can) and check for motion controller jitter again. In my case the jitter is completely gone when I’m under 10ms on the GPU.
I think that there has been some form of performance regression (or a timing issue regarding late latching with the compositor), but I don’t have a specific line of code I can point to. 
Hopefully this helps folks work around, and Epic narrow in on the issue.