Advanced Physics for People Playground

Vanilla has pretty low Physics FPS for physics-based game. Not anymore! Customise your Physics FPS in settings to get better interactions even at high speeds. Moreover, Slow Motion can improve fps and physics accuracy! Increase Slow Motion Scaling for better accuracy in Slow Motion and reduce it for better FPS and objects handling.

Collision quality: Discrete
Physics iteration count: Not too low.
[Advanced Physics] Physics FPS: 90
[Advanced Physics] Slow Motion Scaling: 0.5

To fix phasing through objects Physics FPS should be increased. If you still encounter phasing through objects in Slow Mo, then increase Slow Motion Scaling. Just keep in mind that this will reduce FPS boost you get from Slow Mo. And both these settings add a bit of slowness effect to dragging objects.