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This issue was already reported by Sentry in r1956 topic:
When you set server timescale to 0.4 or 0.3 it causes massive rubber banding. Is anyone else getting this issue?
If you go inbetween with 0.35, Its completely normal. Very very strange.
A lot of timescales are really buggy and rubber bandy.
I can confirm. Tested the issue on Single Player, Lan and Multiplayer. Timescales 0.5 to 1 seem to be slightly faster than 0.2, timescales from 0.26 to 0.49 freeze up the game completely until you shift + tab or alt+tab out of the game and unlock input (doing so lets you use the console to reset the timescale).
This is a massive issue for me as I was trying to create a new singleplayer gamemode which sets player's timescale based on his velocity (a la superhot).
