I had a look at all (because the fire moving is actually a set of models switching around, newt02-05) the torch models in the editor, and looks like it's one of those "hey, lets do something insane here" cases. each model has a different z-size, so I assume there is some sort of special handling taking place that prevents the model from jumping around (however, it doesn't work unless the torch is in a perfect vertical position, and as soon as you give it pitch or bank, the model will start to jump around).

that said, I think fixing this will be a lot of fun pita, so ye be warned.

Well if they do some special wonky thing inside the engine there, there is not much I could do as long as no one is able to remove that stuff.

I haven't witnessed it ingame now, so my first guess is that they move it around in world coordinates and not based on the model coordinates.

attaching a set of torch models that does not have the jumping around problem, maybe it could be compared to the orig set and find out what's going on.

no idea why didn't I think about this before - please flip the T2 torch set 180 degrees around horizontal (X) axis so they could be used in T1.

[T2torches.7z expired]

Aren't the "nojump_torch" already what you request?