Just think about the old mechanical speedometers from back when cars were good.
This works the same way. The needle bounce seemed way over exaggerated.
A very slight wobble seems correct and only a large wobble would occur if the cable was incorrectly installed or damaged. The mechanical type would snap eventually if this was the case.
I don't know much about the gauges from back then but I would be surprised if they were not oil dampened to further reduce wobble.
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