I used to have fps lag but with this it stabilized. Terraria's FPS limiter is just haywire so having the system's own limiter disabled can help. Sometimes with this setting i may see fps rise up to 400-800 so.. it's not that my machine isn't capable. Terraria itself is just pushing breaks too hard (bug by developer, reported many years ago since Terraria 1.1, nothing really done about it). That second bug is fixed by minimizing and restoring the Terraria window btw, so game slows it down to 60 fps.
Also what further tells that's fps is a bug, can be proven with the Frameskip option. You would expect you get smoother gameplay when Frameskip is On, right? As in skip frames if there is too much to process. No, actually for me it runs much smoother and 60 fps with Frameskip off. With On option it can go slow motion.