This bug is reasonably well known in quakeworld. If you're standing on the secret door on dm6 and shoot it with the LG then the door will go flying upwards (before its think function causes it to teleport to the spot its meant to be in).
Juggling players with the LG is an amusing idea, but really it just means that the LG become FAR too overpowered as it means the victim loses most of their ability to dodge, essentually becoming a sitting duck as they go flying.
Imho, the best thing to do is to just remove the velocity change entirely, along with its two if statements.
T_Damage provides its own knockback, but its not normally strong enough to completely counter gravity in part because the attacker would have to be below the victim, and the floor tends to get in the way.
Naturally this is more noticable if you have pent/god mode, as you'd normally die too quickly otherwise, but it is a standard feature.
Also, note that T_Damage can kill exploboxes that do T_RadiusDamage checks which involve tracelines, if the last traceline hits the world then trace_ent is world by the time T_Damage returns.
There may be other ways for T_Damage to change trace_ent.
This is just one reason why globals are evil.
world.takedamage can also potentially be set by ANY spawn function, and also potentially any function that is called within the first 0.2 seconds.