Not sure if you still have this problem, i stumbled on this thread looking for that shield impact effect.
Anyway, From what i gather of this Material effect, the reason its static is cuz your material position is as you put it “In world space”
What you should do is make a vector (or 3 scalar) parameter values using a Parameter collection,
Then in the actor with the shield, call the “Set scalar/Vector parameter” and set those values to match the world location of that shield.
I would image you’d have to call it every tick to update, although you can re-write that so it only calls when the shield has to show itself (to save yourself calculations)
That way, every update it re-centers the material around the shield again, regardless of where you are.
That should fix it
I used this method to solve a similar looking material position thing.