Godot is still experimenting with Physics engines, rolling back to more primitive homebrew solution. The original statement was straightforward.

Ofc, that's just 1 aspect of the engine. There are numerous bugs in the IDE for 2d, which I have encountered. Also, the asynchronous event system quickly becomes cumbersome as a project grows. Ordering becomes important, for which there is no amount of control in Godot (dealing with mouse events, for example). This leaves every developer to implement a stateful dashboard, of sorts, to ensure events are handled in the correct order. This then leads to nondeterministic delays, etc.

I will assume a high-end, state of the art physics engine is a must have for any AAA game.

Not really. There are whole genres where physics isn't really a thing (RTS, card games, turn based strategies). Even where there are physics, they don't need to be complex, just fast. Most fps games, for example Fortnite, don't really use complex physics stuff like joints, and most don't even have fast moving objects.

Most games basically just have rigidbodies. Some cinematic-ish AAAs have fancy cloth simulation or something, but even that is usually prebaked I think.