Thanks for your suggestions. I’ve done as you suggested but couldn’t find any anomalies. The gravity is set to 0 as soon as the grapple hits anything. The target location is indeed correct and nothing changes the state. I’ve gone ahead and manually set the state to falling just in case.
I noticed that by decreasing the force multiplier and unplugging the initial velocity bump (respectively in event graph and OnGrappleHit) the effect is much less noticeable. By plugging the initial velocity back in and unplugging the z component of the force, the effect is the same as described in the original post.