The problem is a mix of hover distance and palm rejection:
If you put your pen within hover distance and place your hand on the screen, everything is fine and works OK till you lift the pen a tiny bit too high for a split second. Palm rejection is reset after 1 sec after lifting the pen above hover distance even when returning within hover distance instantly. Palm rejection is only re-enabled after the pen touches the screen.
Needed software fix #1: Always disable touch input while the pen is within hover distance
See edit below!
Bigger problem: sometimes the pen isn’t recognized for a hundredth of a second even while within hover distance causing your hand zooming in and out like mad while not expecting it.
Needed software fix #2: Random bug: Pen is sometimes not recognized for a very short time
Edit: (Post from down below, editing it in here to summarize this post better):
Conclusion: software fix #1: touch panel driver should differentiate between fingers and palm and ignore the palm when detected.