Equipped Tool/weapon only hits when simulate physics is enabled?

I’m afraid I might have misunderstood you. Could you please repeat what functionality you want to achieve? Do you mean to realize a function where the player holds a tool that does not collide with the player themselves but does collide with objects in the scene?
To achieve such a functionality, assuming the player’s Object Type is Pawn and the tool held by the player’s Object Type is Tool, you need to set the default response for the Tool channel to Block, so that all objects in the scene will have a Block response to the Tool type. Then, in the player’s settings, set the response of Pawn to Tool to Ignore. In the collision settings of the tool held by the player, set the response of Tool to Pawn to Ignore, and set the response of Tool to all other channels to Block. This way, there will be no collision between the Tool and the Pawn, but the Tool will collide with other types of objects.
Additionally, you should not use the Hit event, as its invocation requires specific triggering conditions, which is why you need to enable physics simulation for it to be triggered. If you want to detect collisions, you should call these functions to do so.
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