Correct, but we aren’t talking about them.

Uh... you were talking about them. Those are the two examples of bugs that you provided. I literally wouldn't have made the comment if you hadn't brought them up.

such as restoration bonuses buffing enchantments, the various duplication glitches, and basically everything involving horses

Like if you had said these originally, I wouldn't have even argued with you. I never personally experienced those bugs, probably because I don't play games like I'm a QA tester, but I know many people did.

Not really - plenty of other games use Havok physics and don’t suffer from the same issues, or at least not to the same degree. Perhaps there’s a reason other developers using the Havok physics engine don’t make games with huge quantities of dynamic objects loaded at once.

I've definitely fallen through the world in several of the games listed there. But anyway, specifically, I said persistent physics objects. You can drop a cabbage in Whiterun, walk to Solitude and back, and the cabbage is right where you left it. In, say, GTA, you get out of your car and look away for 5 seconds, turn around, and it's gone. Most games work more like GTA, where a limited number of objects even have full physics simulation, and those that do are only in memory if you've looked at them in the last x seconds. Otherwise, they unload and are lost forever.

Now, whether it's even worth having so much physics-enabled clutter is another question. It certainly contributes to immersion, but is it more trouble than it's worth?