[nerverot]

As a rule of thumb, if I can't hit someone because of how badly they're teleporting around from bad ping, I kick them

That rarely ever happens though, even with high pingers.

But the penalty is calculated differently depending on who initiates the attack. Until either you or the high ping player fire there is no compensation (you're technically both seeing a different version of the map) and when either of you do the compensation is based on the initiating players lag.

So with your good ping the penalty would be relatively low.

It's the other way. When a player with high ping initiates the compensation is calculated using their ping. Which leads to all the weirdness we see with playings seemingly shooting from impossible places (behind the wall on battlement in 2fort) and doing things like front stabs and such.

Lag compensation smooths things out nicely. But really, there's only so much it can do until you end up having to rewind players placement so much that it becomes pretty noticeable.