The bug is effectively a way to teleport in FE games. I can prove that this works because my makeshift noclip script that I wrote a while back for my admin commands still functions. On my client, I see myself moving smoothly, but on the server (and other clients) they see me where I was at the start when I turn on noclip, but as soon as I turn off noclip I appear to teleport on their screen to where I was when I turned it off.
Attached is my year and a half old noclip script that, again, still works and will teleport me on FE games.
This is because clients simulate their own physics – this is a feature. In fact, they can teleport any part they have physics ownership of in FE (though this is usually seen less because there’s no surefire way to tell which parts you have ownership of).
If you want to prevent noclipping/teleporting/speed exploits in your game, you’ll need to carefully observe the character’s position for any abnormal changes.
Yes, client positions will replicate. If you wanted, you could check for abnormal changes like EchoReaper said. Another approach would to just scrap the default ROBLOX Characters, and to have a pseudo-character that is moved by the client sending key-presses to the server, etc.