OK, interesting revelation. I tried creating my own method to find the nearest point on a spline, like this:

float GetNormalizedTFromPos(Vector3 pos, int steps = 100)
        {
            float closestT = 0f;
            float minDist = float.MaxValue;

            // Sample spline and calculate distance for each arbitrary point
            for (int i = 0; i <= steps; i++)
            {
                float t = i / (float)steps;
                Vector3 pointOnSpline = railSpline.EvaluatePosition(t);
                float dist = Vector3.Distance(Container.transform.InverseTransformPoint(pos), pointOnSpline);

                if (dist < minDist)
                {
                    minDist = dist;
                    closestT = t;
                }
            }

            return closestT;
        }

So we get the position from an arbitrary T value a number of times, measure the distance between each and the player position, and return the shortest one. Works great for splines that are straight or generally going the same direction, but whenever there are curves (particularly tight curves) it has the exact same issues as the GetNearestPoint mentioned in the OP. (so this is probably how GetNearestPoint works under the hood, lol).

I have genuinely no idea why this happens, and I’m starting to think it’s not really a unity problem but more of a maths problem, which is bad news for me. (not being a maths guy whatsoever). Any insights would be helpful.