Word up! Yes this is such an annoying issue! Here's been the only thing that helped me:

Make a time line that matches just the interpreted footage (after interpreting) and have only that same type of interpreted footage in that time line. Then under file - project settings - general switch the Renderer to "Mercury Playback Engine Software Only. At least this stopped my footage from glitching out when scrubbing. Once you've pulled selects from that footage, paste those clips into a main timeline.

I shoot a lot on the a7sii, 4k and HD slow motion. There isn't always time to transcode all footage out in ME, and when dealing with different frame rates transcoding can cause other problems.

Come on Adobe! :P I know h.264 is a dELivErY format but premiere shouldn't take a dump when you import some .mp4's! Let's go!

Ok guys, it's time to get professional here. My foolproof workflow is very HDD costly BUT makes editing so easy, so smooth.

Scott Crozier, sorry man, make time for this method. It's the only way.

Understand that Pr. CAN NOT, WILL NOT and WILL NEVER work smoothly with H.264/H2.65 footage because that is a DELIVERY CODEC, not a codec to be working with. You can have a powerful machine like Scott here, and your footage will always play choppy, so long as that footage you're working with has a H.264/H.265 codec. So what the pros do (learned this not just here on Adobe Forums but my film school is teaching the same thing) is that they TRANSCODE the footage into an edit friendly edit and lossy codec, in this case Apple ProRes 422. Essentially it doubles the data rate, increasing the file size, but that's only to make sure that when you export your final timeline, you don't compress you footage further than the dreaded H.2xx codecs already did. You will notice that your playback is smoother. You can use 422 LT no problem, as long as the resulting transcoded footage has double the data rate. So h.264 files with a data rate of, in the case of the Sony a7siii, 280Mb/s, when you transcode it to Apple ProRes, it should be 560Mb/s or a little more. Not only to keep the quality but for easier and smoother playback on Pr. Yes, even with added FXs on it via extra adjustment layers etc.

So guys, plan extra time to transcode your footage via Media Encoder. Trust me, it'll make life with Pr. sooo much easier.

And if you're wondering if DaVinci Resolve has this problem, no, because it transcodes the footage automatically in the background to something friendlier. Yes, even the almighty Da Vinci Resolve AND Avid systems CAN NOT handle H.264 footage because that codec wasn't made to be handled.

Having similar problems with a7s mark iii 4K footage. Its a jumpy choppy mess and then the program will hang. I'm editing off an extremely fast SSD and 24 core computer with an 11GB graphics card I think it should be able to handle it. Not every project has time for a proxy workflow, especially when that is also broken when dealing with interpreted footage.

ADOBE HELP.

Still not fixed I see. Crazyyy!!!

Pr 14.4 (Build 38) and it is STILL a problem. Just tried it again in a new project using 120fps footage from an editing project I finished last week. Didn't want to ruin my timeline. I thought that maybe intreperting footage to 30fps instead of the timeline's 23.976, like I read in another post (albeit outside of Adobe formus) would do the trick, but it didn't, at all.

However, the one method, my method, everyone keeps posting that isn't, I guess, the "standard" of slowing footage down, seems to be the one that works absolutely perfectly, even when scrubbing, and that's to, on the timeline, right click, use the speed/duration option and set the speed percentage down to 20% with optical flow.

Also having this issue, as it seems many people are:

https://community.adobe.com/t5/premiere-pro/scrubbing-issue-with-interpret-footage/m-p/11403719?page=1

This is key functionality that has been broken for way too long.

I'm having a scrubbing issue as well when I'm scrubbing through footage in icon view (not main timeline) and only after I've inserted a selection from that clip into my main timeline. Then, once I start scrubbing (not hover scrubbing) I'll start to see other parts of that clip and it only stops when I slow down a lot or stop scrubbing. It seems it's jumping to my first in I created while culling that clip.
All my footage is interpreted 60p footage as well.