Which is to say ALMOST EVERYTHING. We know nothing (best I can tell) about the sources of lag or what the Devs are considering to address them except for what the OP has mentioned. So how can we intelligently debate whether the proposed change(s) will fix the problem(s)? Here are the things I can think of from the mushroom-like place wherein I dwell.
1. Is lag a math-based problem? If so, the proposed change to the physics check has a decent chance to improve it. Heck, if that check is being made on every swing, clearly that is a programming problem to begin with.. swing frequency increases over time MUCH faster than movement speed does. A target in range and hittable is far less likely to not be by the next swing when the swings are closer together. Tie the physics check to time passage, rather than swings and you will reduce its frequency considerably in higher-level content. Probably more than just by turfing the one for the offhand attack. Determine once per interval which target(s) are hittable and which are not. This leaves open the ability for a TWFer to hit different targets with main and offhand; the OP does not seem to clearly indicate whether removing the 2nd physics check for the offhand will.
2. Is lag a communications problem? Is it about propagating too much information to/from each client? If so, pick a point at which to aggregate said information but potentially allow after-the-fact access to the detailed combat log for those addicted to dissecting the play-by-play post-mortem {hmm.. possible bad choice of term
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3. Is lag a programming issue? Is there some piece of code that requires optimization, and in what respect? Can the worst cause(s) be somehow offloaded to dedicated hardware?
4. Is lag a purely load-based issue? Would throwing more hardware at it make a difference? If so, what kind of hardware? Could you somehow instance the few quests that trigger the issue onto a dedicated server? How many such would be required to make the problem go away? I'd live with a waiting list to start a run cause all the dedicated servers were in use...(within reason, of course).
5. Is lag truly only a problem in certain quests? Can those quests simply be rewritten to avoid it?
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Strong opinion follows... not all argument provided due to space constraints:
I am categorically opposed to any change that many are willing to state forces over 50% of players (80% maybe?) to reroll or respec their toons completely and invalidates all the effort they put into customizing gear. This is a game-breaker. Our entertainment is not supposed to frustrate us to this extent. I am unlikely to be able to continue to play this game myself, and I hear others with similar opinions. Refunding our VIP monies is the least they should do for those of us driven away by such a sweeping change, forget about allowing free TR's or Greensteel rebuilds for those who stay. This changes the product I bought into something virtually unrecognizable. Not fair to do that to any product AFTER purchase. Nerfing is ALWAYS A BAD IDEA. Maybe power creep is a problem, but the solution is to not release power upgrades until they are completely sure they will never be reconsidered, not to rewrite half the combat system after several years in business.
I vote no to the TWF nerf. If you want our input into how to resolve the lag problem, provide us with more information on that problem, not on your proposed 'solution', which looks far too unrelated from here.