We have implemented a solution to the problem where the crop area zooms in/out smoothly in Flex mode, so that the wobbling problem is reduced. It will be available on the upcoming updates and in the Android version as well (hint! ;)).
In the meantime, you can switch between modes while recording depending on the situation. Finally, locked mode switches automatically to horizontal or vertical orientation in version 2.0.
You do have the option of turning off rotate-to-zoom and stick with the prior low-res stabilized image.