It appears this is no joke: I have myself created a few threads and posted a few messages about this. Other people seems to have problems (see this
I am now reaching the point I can no more procrastinate solving this problem. My case is complicated by a requirement I have: I need kinamatics (characters) to fall just like dynamics. Their behavior is only allowed to diverge after the first hit. That is, two object - a fully dynamic one and a fall-enabled kinematic - would have to fall basically in the same way.
This turned out to be pretty much a nightmare, subtle details in my world asset make the whole thing fairly involved. I'm currently planning on using multiple independent simulations to be used as support for each object.
I'm afraid I still don't completely understand what - or why - the kinematic controller code is doing.
Unfortunately, moving objects by applying impulses is not going to work in the long run. There's not enough flexibility, although you might get some mileage.