While riding a minecart on a vanilla server, due to turns and hills, I would sometimes end up in walls, underground, floating in the air, etc. in transit. The minecart follows parallel to where the rails would be most of the time.
When the minecart comes to a stop, if I were in a place where I normally shouldn't be (air, within a block, etc.), if I exited or broke the minecart, I would teleport to where the minecart is supposed to stop.
Also, being within blocks while the glitch is happening deals no suffocation damage, which to me says that the server knows where I am technically, it just didn't send that information correctly to me.