A further problem with networked physics in Unreal is that PhysX engine is not deterministic, so if you repeat the exact same conditions on another run of the scenario, it may turn out differently, so that makes it even more divergent between multiple machines. I imagine you’ll need to make it so only one machine is simulating and replicating to all the others who are interpolating and predicting ahead. In that strategy it still makes sense to simulate on the server, just not on any other machines, but you may have to create your own network smoothing and prediction.
As Unreal changes over to Chaos physics engine this might be partly resolved, IDK. I just heard things and am passing them on.