Judging by my eyes, at about 4 degree, the falling is pretty slow.You might want to set full correction (full power) if you are already at 4-degrees. What is really important is the Derivative factor, or, how fast is it falling when it passes 4-degrees?
Yes, at least I think so, I am driving the motors with 8 bits PWM through two H-bridges.Do you have full forward and reverse PWM control of your motors?
PS:
I think I need bigger wheels, as I plot the PWM and angle at the same graph, at about 5-6 degrees, my PWM is already at 100%.