Hey there @BirkirIvarB! Welcome to the community!
So you’ve got it correct, AI will only attempt to reach a target on the navigation mesh. If it deems you aren’t reachable, it doesn’t try to move to that location.
The problem with the VR pawn is that you don’t really have normal collisions, and aren’t hyper constrained to the ground as say a third person or first person pawn would be.
So in general, if your AI is working fine outside of this issue, the fix will just be getting the nearest location on the navigation mesh that the player is. The easiest way is if the player cannot lean out of the play area or jump up somewhere where the navigation mesh isn’t on, you can just use a trace to the ground and send that location to the AI. However with VR users, they can lean their HMD into things that are much higher or lower than the AI can handle without extra programming.
The node to use:
A thread showing an effective example to use it for the same reason you need (minus VR):