This is not a bug and completely normal for debugging purposes, you need to disable phase debugging mode for it to not phase during gameplay when flying…
Many people already reported and got confused on the past by not understanding, check this one for reference that is about the same misconception and already closed by epic:
During edit mode, open the phone options, disable phasing when flying, then start your game… You can also bind a shortcut keybind to enable/disable it quickier if you want.
Also worth mentioning it is only a debugging feature during edit mode, it does not affect private codes, playtests or published islands behavior.