From what I can tell, this set of steps reproduces the bug 100% of the time:
Set your rotation increment to 45 degrees and enable it.
Set your move increment to 0.25 studs and enable it.
Disable constraint details.
Enable “Constraints” under model tab
Rotate the cylinder on any axis and the orientation will change in weird increments.
This is a known issue. We have a ticket tracking it. I don’t have an ETA for a fix yet.
The IK dragger only does a fixed number of solver steps, so for large movements it isn’t guaranteed to reach the goal. It needs to be more adaptive.