Unity3D camera extremely choppy when moving, no FPS drop

Video of the issue: https://youtu.be/jrWzzOzIWgU

My camera stutters, I've had this issue with unity for a WHILE. One of the things that fixed it was changing the "fixed time-step" to 0.005, but it then started creating some weird physics issues... For the code, I got the "mini FPS controller" from unity's asset store. Yes I've set the rigid body to "interpolate", no fix.

Camera code:

 using UnityEngine;
 
 public class FirstPersonLook : MonoBehaviour
 {
     [SerializeField]
     Transform character;
     public float sensitivity = 2;
     public float smoothing = 1.5f;
 
     Vector2 velocity;
     Vector2 frameVelocity;
 
 
     void Reset()
     {
         // Get the character from the FirstPersonMovement in parents.
         character = GetComponentInParent<FirstPersonMovement>().transform;
     }
 
     void Start()
     {
         // Lock the mouse cursor to the game screen.
         Cursor.lockState = CursorLockMode.Locked;
     }
 
     void Update()
     {
         // Get smooth velocity.
         Vector2 mouseDelta = new Vector2(Input.GetAxisRaw("Mouse X"), Input.GetAxisRaw("Mouse Y"));
         Vector2 rawFrameVelocity = Vector2.Scale(mouseDelta, Vector2.one * sensitivity);
         frameVelocity = Vector2.Lerp(frameVelocity, rawFrameVelocity, 1 / smoothing );
         velocity += frameVelocity;
         velocity.y = Mathf.Clamp(velocity.y, -90, 90);
 
         // Rotate camera up-down and controller left-right from velocity.
         transform.localRotation = Quaternion.AngleAxis(-velocity.y, Vector3.right);
         character.localRotation = Quaternion.AngleAxis(velocity.x, Vector3.up);
     }
     
 }
 

Player movement code

   public float speed = 5;
 
     [Header("Running")]
     public bool canRun = true;
     public bool IsRunning { get; private set; }
     public float runSpeed = 9;
     public KeyCode runningKey = KeyCode.LeftShift;
 
     Rigidbody rigidbody;
     /// <summary> Functions to override movement speed. Will use the last added override. </summary>
     public List<System.Func<float>> speedOverrides = new List<System.Func<float>>();
 
 
 
     void Awake()
     {
         // Get the rigidbody on this.
         rigidbody = GetComponent<Rigidbody>();
     }
 
     void FixedUpdate()
     {
         // Update IsRunning from input.
         IsRunning = canRun && Input.GetKey(runningKey);
 
         // Get targetMovingSpeed.
         float targetMovingSpeed = IsRunning ? runSpeed : speed;
         if (speedOverrides.Count > 0)
         {
             targetMovingSpeed = speedOverrides[speedOverrides.Count - 1]();
         }
 
         // Get targetVelocity from input.
         Vector2 targetVelocity =new Vector2( Input.GetAxis("Horizontal") * targetMovingSpeed, Input.GetAxis("Vertical") * targetMovingSpeed);
 
         // Apply movement.
         rigidbody.velocity = transform.rotation * new Vector3(targetVelocity.x, rigidbody.velocity.y, targetVelocity.y);
     }
 }