This can be solved: Time warp splits the groups, so it is not a global dependency problem. Then again, for the small time steps, there is the envelope/tolerance which can be tweaked.
Yeah you can break dependencies between independent groups. And yes time-warp seems to be a very good idea for conservative advancement. However, I want to do simulations with 10.000 objects all being in mutally dependent contact. In such a context time-warp will just give you a big book-keeping overhead.
That is true. Especially the fission (splitting) and fusions (merging) of contact groups would kill the simulation. However Time Warp overhead cost can be reduced by reducing the number of fusions and fissions. For example by using a extended aabb overlap as criterium for fusion, rather then sharing an actual contact point.