Hmmm, it's a physics engine thing.
Basically the lower it's set to then the faster it can handle physics; higher is obviously slower but in the case of TB you get more reliable collision detection.
However MP physics are all handled by the server, so having silly high max contacts on them will make a match more reliable at detecting a collision - but the added load of having every room will high max contacts will in turn make the rooms more likely to crap out.
That's why IMO mods should be given a poke on a case by case basis - after all it's mostly aikido/sambo high gravity mods that are affected, whereas it'd be a waste to put it on TK, Judo etc.
That way mods that need it become more reliable, and the additional strain is far lower.
Y'all seem to like getting pizzas delivered by air planes yo. ;)