We are facing jerky rotation, like you can see in this 60fps video:
I will try to summarize what we have:
-Movement is a simple rigidbody with set velocity, should be no problem because this action is indeed in fixedupdate
-Camera is a smooth follow action, again this should be no problem because this is done in late update
-Rotation is a pickup of the ground layer plus look at. Maybe the problem could be here but I don't know how this could be performed differently.
This happens when the mouse is idle and near to the player, and the player is moving.