after loading the game into r166 and saving, and then reverting the version back to r164.3, the bug persists.
So the project works fine in r164, you open it in r166, change nothing, just save in new version and it stops working? Then you edit savedWithRelease tag in c3proj file back to r164, open in r164 and it doesn't work correctly?
Have you tried also changing Physics behavior version to r164.3 in the same file? (I don't know if this field if actually used)
So I'm thinking perhaps it's a change in the physics engine that's been bundled with the game?
I'm pretty sure this is not the case.
By the way, why r166? The latest beta is r170.2