I do not have C2 right now, but my guess would be that there is a "more than just contact" between the player and the crate (like, since the physic is off, the player can go inside it a little, then physics is on, and the abberation of the player being inside the crate makes the crate react in an unusual way to repulse it).
my guess would be that you would need to get the player at the border of the crate before enabling physics.