Unlagged is a setting that attempts to reduce the effect ping has on gameplay. While it does succeed in this goal, it also makes aiming a lot easier, because the effective hitboxes are bigger, and you can hit where your opponent used to be, which affects the balance and general 'feel' of the game. Lagged basically means this setting is turned off: normal hitboxes, but no lag compensation. This means that people with a low ping will have an advantage over people with a high ping, because people with high pings will have to aim in front of their target. Pings of 75 and above will notice this, below that the delay is generally so negligible that you won't really have to compensate. Personally, I'd still prefer lagged with pings up to 150, but that's just my preference. I'm not going to have a "fuck unlagged" post: if you're into unlagged, then by all means play it, just don't try to make me do the same.
So your question can be answered in two ways, really. Unlagged players will say unlagged will let you hit things, because they're used to aiming for unlagged. Hitting at lagged will be very hard for them. On the other hand, lagged players will say lagged will let you actually hit things, because hitting air doesn't count as a hit. Use whichever option you like best, and have fun with it.
Also, I disagree about the point made about Trem 1.1. Sure, it's a different game and all, but imo it'd be quite silly to disregard it as reference because of that. At the moment, all Unvanquished players/community members are people who used to play Tremulous or still do, and besides that, Unvanquished gameplay is obviously based on Tremulous. As GPP has little playerbase at the moment (at least the times I checked), I'm using 1.1 for reference here. And whatever preference they had in Tremulous, they will take with them to Unvanquished, if they go here. For lagged players getting hit by things that shouldn't hit them, by their standards, is just as much frustrating as not hitting things they think they're hitting is for unlagged players. Surely the preference of the majority of the target audience of a server, in this case European players, will matter in this regard? Or would you say "you're not supposed to like this setting, go like the other one"?