I know this is a bit of an older post but I wanted to reply here since I was also looking for a solution and think I found one.
If you first use “Get Hit Result Under Cursor by Channel” and then use this to get a trace start and trace end for a sphere trace, it gave me good results.
I set the radius equal to the capsule half height of the character.
Here’s what I got:
The result is that now the characters always hit directly on my mouse cursor.
Old way simply with the “Get Hit Result Under Cursor by Channel”:
New way with sphere trace: