Put back physiterations to 4, true default value
I checked the default value, it's 4, not 2. A value of 2 is causing issue with physics while running complex builds' physics, a value of 4 fixes it.
To check the default value, input gmod_physiterations into your gmod console
gmod_physiterations
"gmod_physiterations" = "2" (def. 4)