The only reference I can find to this is here: https://vrchat.canny.io/feature-requests/p/make-animation-syncing-optional-for-objects-with-vrcobjectsync

I have an animator in a pickup that one state Triggered by a PickuoUseDown will get stuck in a repeating crossfade for the non-owner. The visuals and output log looks normal for the person holding the object, the person observing gets repeated crossfades that sometimes stop on their own and sometimes don’t stop until the object is dropped.

Also instead of playing the animation clip, the observer sees a blend of some sort, which ruins the animation effect. The clip scales the object and activates/deactivates objects over 1 second. The observer will see both objects active at the same time instead of one and then the other due to the cross fading.