for me from a tech point of view, it's the best way to do it in a multiplayer game, whatever engine you use (CE, UE, Unity, etc).
That's where you are completely missing a LOT of techniques, actual physics too (should have listened to those courses !) and showing your complete ignorance.
You just have to manage the in/out of items at the know enter/exist of each nested grid instead of managing the whole content (that can be hundreds of items in a ship) of the grid with multiple vectors.
Stop with your "grid with multiple vectors", please, for everyone's sake. I know CiG propaganda have your head filled with such kind of nonsense but that's not a thing.
You seem to say that better ways to do it exist but without explaining it. So explain to me how CIG should have managed it.
Not using CE to start with. Not using an euclidian coordinate system with a purely 2D fps engine (as everything is relative to a flat coordinate plane). Remember when they had to patch the engine because ships would be considered "under water" at some point ?
I know it's not hard when the 'map' is isolated. It's hard when the 'map' can exchange lot of objects in real time with another map and when some of those objects have their own inside 'map' (a guy in a flipped rover in a ship that is in space can throw through all open doors an object directly to space).
That's where SC fails, hard. Map transitions cannot happen smoothly as they are all moving relative to each other. That's why CiG think "doors are difficult" by the way, and why lifts are death traps, and every object like projectiles or ammunition crossing a map boundary doesnt do anything predictable (or even hit its destination), or why ships suddenly explode because of sudden coordinate jumps. This whole mess doesnt come from a clever implementation: it was a quick and dirty workaround for the limitations of CryEngine.
Of course a bespoke engine would be the solution there, and one with proper spatial coordinates, and relativistic frames of reference. Now think twice before answering it cannot be done - it's been done before (I'll let you guess when and in which game) and for MUCH less than $600 billion..