You know I'm a 2D gamedev, so take my opinion with a grain of salt.
Is physics used as an engine to keep the units all on the ground?
That sounds very inneficient. They shouldn't have to keep checking wether they should stay on the ground if they aren't supposed to jump anyway.
Unless they're being destroyed and parts will be sent flying, in that case using physics is a good call.
Remember, when you start your engine in Mario Kart, there's no fuel simulation.
I do not know how it is done but I think a physics engine needs to work on gravity, for example. I do not know how else to convey Unity.
But with Mario Kart you are right 😂