Physics Interpolation not working Godot 4.3

Godot Version

Godot 4.3 stable

Question

I’m having problems with physics interpolation. Despite turning it on in settings I still see obvious jittering when the player is moving and there is no difference when I switch it on or off.
The I only good fix I have found is increasing the physics tick rate from 60 to 144 and capping the fps at 144, but I have a feeling this isn’t optimal.

Here’s my movement/camera code:

extends CharacterBody3D

@export var SPEED = 5
@export var JUMP_VELOCITY = 4.5
@export var SENS = 0.1
@export var HEAD : Node3D

func _input(event: InputEvent) -> void:
	if event is InputEventMouseMotion:
		rotate_y(deg_to_rad(-event.relative.x * SENS))
		HEAD.rotate_x(deg_to_rad(-event.relative.y * SENS))
		HEAD.rotation.x = clamp(HEAD.rotation.x, -90, 88)
	
	if event.is_action_pressed("exit"):
		get_tree().quit()

func _ready():
	Input.mouse_mode = Input.MOUSE_MODE_CAPTURED
	#Engine.max_fps = 30

func _physics_process(delta: float) -> void:
	# Add the gravity.
	if not is_on_floor():
		velocity += get_gravity() * delta

	# Handle jump.
	if Input.is_action_just_pressed("ui_accept") and is_on_floor():
		velocity.y = JUMP_VELOCITY

	# Get the input direction and handle the movement/deceleration.
	# As good practice, you should replace UI actions with custom gameplay actions.
	var input_dir := Input.get_vector("move_left", "move_right", "move_forward", "move_back")
	var direction := (transform.basis * Vector3(input_dir.x, 0, input_dir.y)).normalized()
	if direction:
		velocity.x = direction.x * SPEED
		velocity.z = direction.z * SPEED 
	else:
		velocity.x = move_toward(velocity.x, 0, SPEED) 
		velocity.z = move_toward(velocity.z, 0, SPEED)

	move_and_slide()

Physics interpolation is not yet implemented for 3D physics. There’s a setting for it but it doesn’t do anything at the moment.

You can read the official blog post for Godot 4.3 which states this. In the blog they reference a PR which promises to deliver on this feature in the future.