Yeah, there's lots of things wrong with that code.
It was great for it's time, and a massive step above what vanilla Q1 did, but it still needs a good thorough working over; it's over 8 years old, after all. Bugs come out in the field.
The positional interpolation should be in CL_RelinkEntities rather than in R_RotateForEntity for starters; just so much cleaner and less hacking around special situations required.
Animation interpolation is probably better calculated at load time (especially now that memory is no longer a pressure); expand the verts x3 or x4 and fill in the interpolated verts.
Muzzleflashes.
And this bug, of course...
