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Destructible not forming extended structure when put inside blueprint

So I set up my destructible to act like a solid wall, and only the chunks that get hit break apart.

I have the “form extended structures” option checked and if I place the destructible in the level and overlap with any static object, it acts like it should as long as the static is overlapping any part of the destructible. But this isn’t working when I spawn the static inside a blueprint. It’s also overlapping the destructible object inside the blueprint but the destructible just breaks apart fully when fractured. Doesn’t even work if the static mesh is inside a different blueprint. Only works with static meshes PLACED manually inside the level.

So confused…

TLDR: Extended Structures work fine when static mesh is from outside BP. Not when static mesh is inside BP.