In PhysicsSystem.cs, in the HandleAllConstraints() method, bool gotOne is set to true, but should be set to false.
bool gotOne = true;
should be :
bool gotOne = false;
Because in the code, the only operations on gotOne is
gotOne |= XXXXX
So gotOne will never be false if it is initially set to true, and it will never be able to break out of the collision iterations early using this:
if (!gotOne) break;