Create a new Third Person template project (no C++ to save time)
In Editor Preferences, go to General/Miscellaneous section
Turn off “Use Less CPU when in Background”
In Editor Preferences, go to “Level Editor”/Play section
Set Number of players to 2
Check “Run Dedicated Server”
Uncheck “Use Single Process”
Set “Editor Multiplayer Mode” to “Play as Client”
The dedicated server will spin up first. The moment the second client starts to load the editor will freeze up.
I debugged it and found that it’s waiting on an event that never comes.
Workaround 1: Don’t uncheck “Use Single Process”
Workaround 2: Don’t turn off “Use Less CPU when in Background”. You can turn it back on when the editor gets the game loaded.