@TTaM: Thank you for posting your results. Other users may find this a useful solution.
@arbopa: I agree this is not the answer to how to implement collision for a prone character but it absolutely is the answer to did Epic forget to add a basic character function to blueprints. This is not meant as a “dodge” but an explanation as to why the capsule isn’t adjustable for prone like it is for crouching.
Hence, I am closing this post as answered, but feel free to start a new post asking how to implement collision for a prone character or how to make a custom root capsule for a character. While not supported “out of box” by Epic, other users like TTaM may be generous enough to share their solutions.