At first I thought it was just lag. It's a horrible default setting in my opinion, since when I hold alt+tab, I don't expect to have to wait. As default, it seems to make my experience less smooth.
When quickly switching between two applications, you don't necessarily want to see a popup. That is what the 0.2s is for. You can decrease the actual window switch delay by changing the speed from 4 to ~1. This is probably the setting you are looking for - I don't see any reason for delaying the pop-up.