In my experiences with Smooth sync, it has caused more problems that it solved. It struggled to handle child components and components attaching and detaching from other components at runtime.
I ended up writing my own replication logic
I found the solution for this problem.
I had the smooth sync component attached to the capsule and had it replicate every translation except pitch. Then I had the mesh have its own smooth sync component and only replicate pitch.
You can not have two components in the same hierarchy to use the same smooth sync component, you need a separate smooth sync for each component and they (the smooth sync components) cannot replicate the same rotation, translation or scale component (xyz). You can change which is replicated in the settings of the individual component.