I think, to a certain degree, this is intentional. It might be a bit extreme at the moment, but real rockets have to be built and flown carefully so they don't fold in half too. Tall skinny rockets are supposed to be more unstable. The unrealistic part is how flexible they are, in real life they would just snap and explode long before going banana shaped. I guess that was ruled out for being too unforgiving, but it would be way too easy to build rockets that don't look like rockets if they were processed as one rigid body. I'm sure they will find the right balance between rigid and noodle sooner or later.