Ok, I will try to keep it short. VaM uses Unity engine, which like most engines uses a separation of physics updates from anything else. The main update, running Logic/Graphics, simply tries to run as fast as possible, it's measured in frames (or images) per second...also known as FPS. However, physics run seperately at particular rate measured in Hertz (Hz). That's because for physics you want a stable rate that is not affected by sudden drops in performance or similar, as that would cause issues. This Hz number is the "Physics Rate" setting.
Now how this works in Unity on the technical side is that the physics update is done at a particular point during the main update loop. We basically decide whether we did enough physics updates to keep up with our desired physics rate since the last frame. Let's say our game runs at 90fps and we want to run physics with 60Hz. In 2/3 frames we would need to do one single physics update and in every third frame we don't need to do anything for physics. However, if our frame rate drops to 18fps, we would need to do much more physics updates per frame, which might slow down the fps even more. Now at 18fps we would need to do sometimes 4 updates and sometimes 3 updates to keep up with 60Hz for our physics.
That's where "Physics Cap" comes into play. It's the limit of how many physics updates we are allowed to catch up on per frame. For VaM the maximum setting is 3, so in those frames where we need 4 updates, one would be skipped! Skipping physics updates causes physics to run slower, which means trouble. For example your animation might run out of sync with audio, since that is using real time and doesn't wait.
Always set Physics Cap to the maximum, which is 3 at the moment. Make sure the frame rate you achieve with that is still a bit higher than Physics Rate divided by 3. So you may need to reduce your Physics Rate, I usually run at 60Hz. Your physics might still run out of sync slightly, for example if you have momentary frame drops during scene load, but a well build scene should be able to handle that. (e.g. have your animation trigger short audio clips instead having a single long audio that is supposed to stay in sync with animation)
A setting like this should not even be exposed to the user. It should be set automatically. But VaM is an indie game, you have to take shortcuts...