On component begin Overlap (Box) → switch has Authority (Authority) ->…
Other Actor → Cast to BP Knight (passed) → do your branch ->…
Apply Damage … You have to pass a reference to the Damaged Actor pin (As BP Knight). There must be a damage value > 0.00
Overall you want the Servers [Authority Proxy] of the character to be the one getting damaged. Thus your Overlap has to be triggered on the server and only on the server.