No you do not need the physics material override for this.
Okay, so you added a collision box bigger then the cube, what are the collision settings on that collision? Because if that collision is blocking the projectile, then the projectile will never hit the mesh, thus never calling event hit.
If you want the collision box to trigger the event hit then you need to set the collision settings on the trigger box and make sure you are using the event hit of the collision box and not the mesh.