Okay, we are one step further. The feature that's causing the issue is "Allow taps on the touchpad". A short, quick move is registering as a tap instead of a move, and snapping it back to where the "tap" (move) started from. I guess it's to liberally register taps, but it's way way too liberal.
Turning off allow taps on the touchpad is no solution though, I must be able to tap, not be forced to click, and must be able to make small quick moves without it registering as a tap. Is there somewhere I can edit this distance or timing for it to be considered a tap? perhaps in the registry? Or otherwise? It's terrible, I can't imagine they even used this notebook before releasing it like this.