While exposing more of the internal update mechanisms can sometimes be useful, I would argue that all the physics-related issues should be considered a separate problem.
The tunnelling effect people encounter when using physics behaviours and collisions is a well-known problem, and fiddling with timesteps is not the best solution to it. It might help in certain situations, but it's not a robust approach. The "proper" way to deal with this is to have continuous collision detection, with swept surfaces (point > raycheck, sphere > capsule check, box > swept box, etc.), and broad/narrow phases.
I haven't used the physics in C2 yet, but if the built-in functionalities are not satisfactory, that's what we should be asking for. Which doesn't conflict with the idea of having more control over the game timesteps.