Display MoreRubberbanding can happen in even single player games, that have nothing to do with being online, as a way to deal with client lag in rendering the environment. Then if you're playing with someone else in a peer to peer game, regardless of your connection with the server, your connection with the other player will matter more. This can result in from your point of view, them bouncing around erratically, yet you see yourself as playing smoothly, while they at the same time could see you bouncing around, yet they see themselves as playing smoothly, so both call the other a lagger. Another possibility, especially when you're not the host player, is you see yourself rubberbanding, due to lag/high latency with the host player, and the correction that happens.
In a peer to peer game you could literally be in the same room as the servers, with near 0 ping to the servers, but if you're playing with someone that you have a high latency with, you can get really bad lag, rubberbanding, and so on.
You always maintain a connection to the servers, as the servers still validate, and record things like kills/XP gains, and when you pick up loot. With peer to peer online games, you just also connect to others when playing with them directly, which is why I said you'd get those extra connections when doing dungeons with others.
There's a lot of online games that use peer to peer connections, rather than being fully server based, since again, that increases their costs. Most online games people like trying to call MMOs, like this one, are just online games, and at least most of those aren't running completely off of servers, but using at least some degree of peer to peer, people just do realise it, and keep thinking it's all server based, like actual MMOs are.
The rubberbanding that I spoke of when playing solo wasn't remotely related to rendering issues as I know for certain that the specs of the PC I'm using to play the game has much more processing power required to run the game. Even then, in single player scenario a peer-to-peer connection theory is invalid as there is no peer available since all the games that do peer-to-peer group peers up in different sessions (a.k.a parties/instances in this case). If you really want to force the peer to peer theory then in a single player party scenario the peers are virtually you and the server.
In a single player instance scenario, the basic practice in network security would require the server to validate character HP and coordinates for every action that occurs in the game. This way the client cannot cheat simply by freezing a portion of the process's memory. This is the main cause of the so-called "lag spikes" that we are used to, one where you are at A at time X but suddenly jerked back to location B that you were at X-2 (as an example). This lag spike happens because the client pre-process your movement/action as "approved" before receiving an acknowledgement from the server, and however received a signal from server that such movement/action was not allowed.
One of the indications of such a protocol took place is the damage indicator, sometimes it will appear ASAP (because that's as fast as we can perceived) while others delayed for maybe half a second or a second. You can argue (but whether it's true or not is not certain) that this is due to the local computer's own delay, but you can just unplug/turn off your internet midway in a dungeon then go hit the mobs a few times, no damage indication will pop up -> this clearly prove that no damage will take place without the server's approval. A lot of rendering and computing elements will be done on client side but things such as damage/hit point will most likely be done on server side. In peer to peer the movement of other characters will most likely be pinged to your client at the same time it pinged to the server so that your client can pre-process it to create a "smoother" experience. The only true peer to peer games are the ones originally meant to be played as a single player game, such as darksoul or monster hunter (please simply imaging playing with your friend through LAN).
TLDR: for ping 100-200 players the only thing that should be affecting them due to their ping (assuming the servers work as intended) will be a slight delay in damage/hp updates and invulnerability skills being a bit off while they will be able to move like normal and skill effects/usage remain unaffects as cooldown isn't that big of a deal because you are not using skills every 1-2 seconds (a 0.5s increase in a 10s cd still will most likely go unnoticed).
