I switched to unbound and increased the query timeout to 5 and enabled drawdebugvolumes in the FlyTo node, which generates a green square anywhere I place my FirstPersonCharacter
In this case, the fairy is set with Behavior to run: HotPersuit and GoalBot: first person character - to get to the actor on the ground.
Also, if I drag the fairy around, she rotates toward the player faithfully. The fairy is simply a child blueprint of your BP_NavagatorPawn, which exhibits identical behavior.
Edit: Figured you could use some more debugging - I enabled pretty much all debug options on the flyto node. I then spawned the fairy and ran under her, generating the paths you see below:
http://image.prntscr.com/image/17659c4b1db54aa184db53624b16d45e.png
Your assistance is highly appreciated!