I have noticed that in 3.7.x window movement while a fast drawing app like glxgears is open is very slow. The window lags behind the pointer and if I move the pointer fast enough no movement takes place until I release the button. So something seems to be blocking the compositor at this time.

I can reproduce this with raw mutter so I bisected it and the result was:

c1ac9d1dff0d851f2b35983a7789b22e17a05904 is the first bad commit
commit c1ac9d1dff0d851f2b35983a7789b22e17a05904
Author: Jasper St. Pierre <jstpierre@mecheye.net>
Date:   Tue Nov 20 20:57:13 2012 -0500

    ui: Use XI2 to fake GDK events
    
    This removes our final dependency on Core Events, meaning
    we can remove support code for them soon.
    
    This commit is a bit ugly as it requires ui having a dependency on
    core, but this is already a hack, so this is thus a hack inside a
    hack, and two hacks make a right or however that goes.
    
    https://bugzilla.gnome.org/show_bug.cgi?id=688779

:040000 040000 5cc25872fa192fb2fd4bd383152b4b818dec2faf 7c8a36d51bc1bc6f23887e87fb28616ee937bcbe M	src


And indeed just one commit before this one works, and starting with this it stops working. 

A simple hack like this one:

---------
diff --git a/src/ui/ui.c b/src/ui/ui.c
index 1fe5cd4..c01a922 100644
--- a/src/ui/ui.c
+++ b/src/ui/ui.c
@@ -108,6 +108,8 @@ is_input_event (XEvent *event)
 static gboolean
 maybe_redirect_mouse_event (XEvent *xevent)
 {
+  return FALSE;
+#if 0
   GdkDisplay *gdisplay;
   GdkDeviceManager *gmanager;
   GdkDevice *gdevice;
@@ -232,6 +234,7 @@ maybe_redirect_mouse_event (XEvent *xevent)
   gdk_event_free (gevent);
 
   return TRUE;
+#endif
 }
 
 typedef struct _EventFunc EventFunc;
-------

Restores performance while it does not have any obvious side effects (events in the window menu still work fine).

So why is this code needed at all what it is supposed to do? How does it "get confused by our direct use of X grabs in the core code" ? How does this confusion show up?

There seems to be nothing obvious either why this does block the compositor.