2. Is an absurd example. That is not how you do networked physics in 2026. You use jolt for cross-platform determinism with rollback, replicating only inputs.
I hope your game world is small, and your player count is low, otherwise: 1) your server will be waiting for inputs from the most lagged player, 2) you will become entirely CPU bound on the client performing all this rollback.
Approaches that don't suffer from these two problems send state, yes they send a lot more bandwidth, but they scale better as the number of players n increases.