I've never actually seen a physical example of a system without a continuous first derivative. For example phase transitions, commonly touted as an example of discontinuity, don't actually occur until the matter has gone a bit over the point and a transition nucleates somewhere. The probability of a phase transition is a continuous function of temperature, with continuous derivatives.
I'm skeptical that discontinuities can exist because, if they did, they'd serve as infinitely powerful microscopes. If there's a discontinuity in nature, it must exist at absolute zero. I don't have a similarly good argument for continuous first derivatives but I do think it's interesting that there are no examples AFAIK.
Any physical system that makes/breaks contact, such as walking robots. Sure, the foot is not perfectly rigid and technically is a stiff spring. But from a computational perspective, problems still bear all the hallmarks of a discontinuous system such as requiring a very short integration step.
Quantized space is absolutely discontinuous, and tunneling is a discontinuous system. In fact assuming the universe is quantum it’s discontinuous in reality but the appearance is continuous. But these distinctions aren’t super useful unless you’re dealing with these sorts of effects. Continuity is the approximation, discontinuity is the reality. But depending on what’s useful we use the mathematics that help us.
Tunneling currents are continuous in every parameter, although I admit that when you're dealing with particles you have continuous probability distributions with continuously varying means, rather than continua of matter. (But that should count, because all macroscopic variables are expectation values.)
Specifically at quantized space and time levels everything is discrete even distribution functions. There’s no sense in having a continuous spacial distribution sub Planck lengths.
I'm skeptical that discontinuities can exist because, if they did, they'd serve as infinitely powerful microscopes. If there's a discontinuity in nature, it must exist at absolute zero. I don't have a similarly good argument for continuous first derivatives but I do think it's interesting that there are no examples AFAIK.