That’s correct, which is why for the most part collision between two dynamic objects over the network is an unsolvable problem. Even Ubisoft haven’t cracked it yet, there’s still a lot of research to do:
http://www.gdcvault.com/play/1024597/Replicating-Chaos-Vehicle-Replication-in
Elhoussine linked me to this on Twitter. They take some interesting approaches. They use P2P, but funnily enough it looks like S2C works better for this.