As well as showing the issue, please be sure to also post details on how you came upon it. What versions of AC and Unity are you using? Have you modified Tin Pot in any way before trying it out?
Try toggling Move with Rigidbody? in the Player's Inspector, and then amending the Interpolation values of both his Rigidbody and the one on your Draggable object.
AC 1.58a, unity 2017.1(in unity 5.6 I had the same issue)
I tried everything(and different settings for collision detection too) - still shaking but without checked Move with Rigidbody is less but still visible.
Recreated. This will be improved in the next release - though be aware you may also have to lower the "Fixed Timestep" in your Time settings if you rely on Rigidbody-based movement for your Player.
Comments
Try toggling Move with Rigidbody? in the Player's Inspector, and then amending the Interpolation values of both his Rigidbody and the one on your Draggable object.