Based on my experiences, it is more related to the 0.5.0 library… I find it not as forgiving, particularly with WiFi congestion (probably due to less tolerance to data dropout??).
In some use cases I reverted back to 0.4.8 Library, but generally I am just waiting for further Library updates to see if they help.
You could revert back (Library - not server) and test to compare if it is the same for you or not.
server.properties is correct… you can also set these on an individual project level with sketch commands… for example in one of mine…
// Tweek numbers to match needs... don't just max them out.
#define BLYNK_MAX_READBYTES 1024
#define BLYNK_MSG_LIMIT 1024
#define BLYNK_HEARTBEAT 60
#define BLYNK_NO_BUILTIN // Disable Apps built-in analog & digital pin operations. Using vPin only