Funtional Test does not support testing with Dedicated Server. I was trying to do the same about a year ago and after some engine code debugging I found that multiplayer feature for FTs is just not implemented. Also, I found this:
Since then I came up with my own solution, which is essentially (1) extending the AFunctionalTest class to add Server-Client synchronization and (2) using Gauntlet Automation Framework to start Dedicated Server and Clients for testing.
PS: Currently, I am preparing a talk about my solution. You can watch it online here: