Yeah, the target Controller possesses the passed in Pawn in the custom GameMode event called during the OnPostLogin event which is also in the GameMode.
The first Custom Character Init is an event, (which is being called on the server since we are in my custom GameMode) in my custom Character blueprint that sets up certain variables and will eventually call the initialize event in my custom Player Controller that will set up the Inventory. The second is a RPC to the owning client which will eventually call the same init function on my Character blueprint. So first server, then client calling the same intialize.