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I am not sure that we are talking about the same thing. If I was to use the camera target type and spawn a actor projectile from an offset from the location it the projectiles would not line up with the crosshair. In order for the crosshair to be accurate the offset need to be variable, depending on the targets distance from the camera. Obviously this is not the way it works in the real world, however it feels more natural for the player.
I have drawn a quick diagram which I hope better illustrates how I currently handle projectiles from my third person character. Essentially I get a look at rotation of the hit location from the raytrace and fire the projectile from the character in that direction. (If there is no hit, the projectile will rotate so at the max range of the projectile, it will line up with the crosshair).
