there’s a lot going on, perhaps you will need to upload your scene file but in the Dynamics tag there is Collision/Size Increment, that’s 0 by default but if it was increased that could be a problem. And in Mode/Project/Dynamics/Expert there is Collision Margin, that is set to 1 cm by default which with the default capsule size of 200×100(diameter) is not noticeable, however, if you made your capsules a real-world scale 1 cm is way too big and you will have to scale that back. As for the rocketing, that can be a bunch of things, you get that with objects interpenetrating which is usually solved by increasing the Steps per Frame and Iterations in the Project/Dynamics/Expert settings or just too much energy in your dynamics – lower Bounce and set Collision Noise to 0, collision noise is great for making a dynamic sim be random but with a lot of bounce too it can just be introducing too much energy for things to stop or so much they start to jump around.