In the interest of transparency, this article gives a general overview of current acknowledged issues and limitations the game has, and provides a rough idea on how these are expected to be resolved. Note that these do not include run-of-the-mill bugs, which will be patched and sorted out.
Characters and locomotion
Locomotion improvements are a constant goal, and while the previous patches improved the situation with things like terrain alignment and smoothing out the general movement, there's still a ways to go before we're statisfied with it.
AI
Limited behaviour
In the first early access release, carnivore AI characters already hunt for food, but herbivores currently have no such mechanics. Drinking behaviour is also generally still missing for AI. More complex behaviour beyond tending to basic needs is being thought of.
Pathfinding
The AI traverses across the land and through the water, but pathfinding isn't flawless yet and is an ongoing point of improvement. This can sometimes lead to AI getting stuck or moving in an unrealistic manner.
Low resolution landscape/sharp edges (jaggies)
Unreal Engine is in a state of transition, with old systems soon parting for new replacements in Unreal's upcoming major release, UE5.
One such system is World Composition, which briefly stated, allows you to carve up the world into smaller tiles so that you do not have to load the whole world at once. This system is rather cumbersome, incompatible with newer features of the engine (like the aforementioned water system), and will be replaced in UE5 with a tool called World Partition.
As such, the decision was made to not tile the landscape, instead using one large contiguous landscape for the first map in the game. The only way to make this feasible at the scale of the world the game has however, is to drastically limit the resolution of the landscape. This in turn causes sharp geometry to be visible in some places, creates a lot more manual work to smooth out terrain (where possible), and is all-around not a great long term solution. However it still felt like the best option for the first incarnation of the map, as it would allow all the systems to be tested at proper scale. This limitation is expected to be resolved when the landscape can be recreated after UE5 becomes stable enough to support it.
The game has transitioned onto UE5 with 0.6.0, but the new map has not yet been able to take advantage of World Partition. This is slated for improvement at a later time, once the editor tooling becomes sufficient to support this.