Some update if someone would even read this :p I think that I need to investigate extrapolation logic as well. Position extrapolation seems to be fine (as with delayed data, I believe it can't be better) however, extrapolation of rotation and velocity seems to be pretty weird and often out of sync with real state (and what is the worst it seems to never stabilize unlike position). Today I realized that even if I would implement dynamic interpolation offset adjustment based on latency, it would fix gameplay only for players with low latency, but users with high latency would still act very randomly for clients with low latency, so I need to fix strange extrapolation behavior anyway as it seems...