Thanks. I begin to understand now. The 'dynamic deformation' a mouse action brings would be seen as a displacement within one frame and hence suggest huge velocity. With 'inertia' unchecked, the velocity is reset to 0.0 at each iteration, to avoid the huge energy that would follow from such velocity disturbs the system.  With 'inertia' off a vertex cannot build up velocity so, to the eye of the user, the simulation is slowed down. In this mode you would not be able to 'throw' anything because it would be falling down dead (at constant speed) . Also pendulum motions would not be possible because no kinetic energy is accumulated.

Would it be an option to have this not as a complete switch-off but as a transition? First of all put a limit to velocity and restoring the effect of velocity in a number of frames?  .