What I was thinking originally is that, if the controller used AddForce there might have been something lost there because the object which should receive the force is kinematic. But with SetPositionAndRotation there’s no inertia at play.
However, another thought: is the Rigidbody set to interpolate?
I can see that you have configured the CoherenceSync to apply the position to the RB directly (with “Direct”).
This writes directly to the transform’s position and rotation, and it’s something many people want. But try maybe switching it to “Interpolated”, and see how it goes? That would be the equivalent of calling SetPosition and SetRotation on the RB, which is what the character controller does.
