Okay, I know it says values higher than 1 make it impossible to control the player ship correctly, although I don't know if there's a technical reason why it can't be done (since the SpeedUp mod also allows people to play at higher speeds). But one thing I noticed, if combatStepsPerFrame is set to 2, then when you right click to turn on shields, they turn on then turn off right away; you lose your zero flux speed bonus and then get it back again a few seconds later, but the shields never actually go up. Similarly if you had forced shields to turn on (such as Paragon's fortress shield), when you right-click, the shields go down then go right back up again.
If combatStepsPerFrame is set to 3, then shields go up normally. So I'm guessing it's something like, at combatStepsPerFrame = 2 it's sending 2 right clicks per right click or something, causing this behavior.
Playing at combatStepsPerFrame = 3 seems okay if a bit fast, but I'm not noticing any particular problems with the player-controlled ship -- so I don't know if the warning is for technical issues or if there may be some loss of fidelity at receiving player input. (I assume the rest of the ships are fine since it just calculates extra world frame states between each graphical render frame is my understanding.)