Its true , trying to implement a "physical" confinement is fascinating and could maybe have other applications .
However I think manipulating objects should be something handled by the engine, whatever the type of object, so there must be a "normal" solution to the strange behaviour seen
and if there is not I feel the engine needs some fix in this regard.
So as soon as I finish my live-weather mod I will experiment with coding "object manipulation" ....its a basic feature which especially VR games like outerra world sandbox MUST have.
So its worth trying to check if its already possible without glitches or what needs to be improved (possibly in the engine) to get it working