Ya, I think this is why people move all funky:
Two people: Person A, person B.
The MTA crew had a problem. If they just copied the position of player A, then the players would seem to move all jerky to person B, because of lag. The running animations would look like crap to person B.
SO: they made it the the person kept running straight for person B, until A's actual location was sent... I'm pretty sure that this bug has to do with GTA3 crashing for A, but MTA staying open.
Since no new info is sent, it just looks to B that A is in fact running straight ahead, until GTA3 is opened again.
Sorry if it's a bit cryptic... I'm just not gonna take the time to fix it.
ONE MORE THING: DO NOT take this as fact... It's 100% possible that I'm wrong, but this seems like a very very likely possibility, and the best thing I can come up with