There seems to be some sort of undocumented soft limit or bug that was introduced in the scaling update that causes contacts to break when there are too many receivers and senders close to each other. So when trying to show off complex avatar systems or in large lobbies of people close together contacts can not behave as intended as they will output the wrong value when interacting with other players. This "soft limit" is less than the hard limit of 256 components that was introduced in the same update. So if someone has an avatar with more than this soft limit by themselves it can cause the contacts to break for not just themselves but those around them. Alternatively, if there are a few people who have avatars that combined go over this limit and are in the same space together the interactions between themselves and the players around them can have weird behaviors.
Here is a video that goes over the avatar set up and interactions in game to show the issue:
Avatar ID of what I use to test in the video above is "avtr_5414f195-9453-41e4-8876-cf8ce10e48e1"