First off what is Lag? Basically, latency. It's basically the time delay between a cause (which may be you pressing the R1 button) and the effect (Kill) .
That said, if anybody of you thinks at lag as, for example, framerate drops, you're totally wrong. That's another kind of issue.
The most famous expression of what lag is: "the guy didn't take any damage" "I was sure I hit him" etc. This happens because you, the player and the server see everything in a very different way, depending on latency: the more you're close to the server, the more your vision of the game will be the same as the one the server has.
Now, let's do a practical example:
This Image shows what happen exactly: The blue/red hitbox is what you actually see on your screen, the soldier running is where the guy is according to the server. Now, if you shoot at the hitbox (where the enemy actually is according to you) you are not hitting the enemy according to the server, hence, no damage. Those people who strafe faster than you are not lagging at all: they're actually communicating with the server faster than you, and, through lag compensation, your system will "speed them up" in order to "catch" the server.
Strafe: if you strafe and the enemy don't hit you, you're not some kind of demi-God.
Here's what happen instead: if your enemy communicates faster than you with the server, he will be (both for him and for the server) on the right side of the screen, while you will see another story: he still didn't move, according to you, because you just can't communicate that fast. That's probably why scouts hit detection looks bugged according to someone.
Now let's consider Dust, specifically:
for what I've seen, Dust always try to bring coherence for everyone on the battlefield, but that's not always good: in high latency situations (PC, FW) you may have a lower sprint speed, feel your character turning speed slower, you may experience a good amount of latency, for example using a forge, between you releasing your R1 button and the bullet actually leaving your forge gun. And the bad news is, that's normal! Your input (R1 release) have been sent with a certain amount af delay! it also results in a mostly unplayable experience for those who have high latency (100 + ms) because of...hit detection. Of course, this issue applies to all weapons, not only the forge gun.
That said, what do you think could be done? are people with high latency to certain battle server doomed? Please Discuss.
Edit:
This Video and a ton of other videos of killcams in Cod, show you how bad it could be.