referred me to your project today and I took a look. I think there are some engine fixes we can make, but there is also a simple workaround you can use in your project as well.
The issue here is that you have the capsule set up as:
HalfHeight: 150
Radius: 150
CrouchedHalfHeight: 145
The actual capsule can’t actually get a lower half-height than 150 (it must be >= radius to be a valid capsule/sphere).
The default behavior of the engine was to allow this to set the IsCrouching flag to true, but the capsule didn’t actually change size. Then there was some code in the character that says if you are trying to uncrouch and you are already at the target height, don’t uncrouch (this is broken and I’m fixing it). In fact Crouch itself says don’t crouch if already at the crouch height, but you happened to avoid that by having a lower CrouchedHalfHeight. I’m fixing the engine to simply toggle the state no matter the current / target sizes, you should be able to set the crouched state as you wish.
You can work around this easily by setting the standing HalfHeight to 150.1 and CrouchedHalfHeight to 150, for example.