Floating NPCS is a known bug that I still haven't found a truly workable fix for other than a quick hack to change target z to mob's z. Even that doesn't really do to good of a job.
In the newer stuff I've been working on, mob movement isn't as spotty (try playing with the npc movement tic #)..
Warning: I've been messing with this file, so you may need to tweak it as needed.
I intend on releasing a more complete update with the next source release from the dev staff.
best,
--MV
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