It appears that the timing of the damage splats on NPCs relative to the attack animation of the character is off. I have observed this both with swords and kicking/punching, that the damage splat occurs just before the attack animation even begins. This is backwards, and the damage splats should appear during the end of the attack animation (i.e. right when the sword blade finishes moving downward for a blow, or as the foot impacts the NPC for a kick).

Please note that it should not simply be an issue of when the damage splats appear, but also when the actual damage is done to the NPC (or other player) as well. Hopefully the damage splats appear exactly at the same time when the damage is subtracted off of the subjects hitpoints.