The problem is that the camera is moving relative to the Actor (thus your actor doesn’t move in World Space because the camera is inside the play space. Play space is effectively your Actor). Walking in the play space is moving the “Camera” and not the pawn / actor. That is how the Lock To HMD checkbox works, the engine is doing a very simple Query orientation and pose from an HMD if it is attached and that option is true. The collision capsule knows nothing of this. Sorry I don’t have a better answer for you, this is actually making me wonder what happens when we go between Vive / Oculus.
One option is to always be moving the actor to keep you in the center of the play space but there are most likely a bunch of “gotchas” with that technique.