The jiggle physics are still there dunno what is this what people talk about game "losing them"
There is funny enough a shader detail option that putting it to low disables the physics which is... Odd? It is a setting most would not think associated with such a "feature" but it might be only enabled now if you put it to "high".
But I dunno what people are talking about everything jiggles just as before... Well actually it feels the jiggle is now less divorced from framerate, it was a weird feature at high refresh rate the jiggle just seemed to be working at it's own FPS like 2D animated flames locked at 30fps animation or something.
PSO3 being actually MMO would be something but I would not like it to happen at expense of gameplay. One reason PSO2 is like this is because it allows some "client powered" stuff and enables the gameplay systems we have, where lag only can cause bosses to warp around, adds lag to your weapon swapping, and maybe item usage, not sure, I think it did whenever I was lagging hard in the game. Of course also your damage values lag longer before server acknowledges them but the damage still does happen eventually that you caused.
Because of this, the game had bumpy ride with BroomOP destroying whatever they could and "SEGA FIX IT" mentality. Which they did but now we have this very messy gameguard that breaks installations left and right.