I'm not exactly sure how you want your movement to be. I took a look in your capx and here are some remarks :
- instead of positioning your upper part over the lower every tick, use the Pin behavior.
- if I understand space type movement, you should do multiple bullets behavior. The first will be the "booster". The others will be the straffs. Pushing left and right would increase/decrease the power of the straffs, making it strife left and right. Pushing up would increase the speed.
Here is a capx doing this. The angle jump isn't here anymore.
capx
EDIT : i added more details in the code. To be clear, the problem you had was that rotating the lower part 90? when the left / right was pushed made the ship do a clean 90? angle in space, strange. Straff is here to help simulate that. I think the better way though would be to go with the physic behavior, and apply forces on acceleration/deceleration and side pushes.