UPDATE
Now that the colliders-revamp branch is (or just about to be) merged, the only purpose of this issue is to mark the fact that the circle collisions do not work with rectangles yet.
Does this improve an existing feature or does it add a completely new feature?
This feature could be implemented in two ways:
Method One
Just simply upgrade the current collision code to support all of the forms of collision with support for rotation, scale etc.
Method Two
Strip all things like physics and collisions out and make them modular (Similar to Unity's component system), that way we keep the instance class short and sweet, and only have the tools that are required.
Describe the improvement/feature you'd like
The end goal is to have a collision system that allows all forms of collision to occur with support for the new abilities of the engine (i.e. rotation, scaling etc.)
Describe alternatives you've considered
The alternatives are described above.