First off I should mention that I am not all to familiar with UE4 and am still very much a beginner in that regard, though I do have game development experience and experience with C++.
Now I assume that UE4 follows the same way most games handle networking. By that I mean each client is basically responsible for 1. Getting input from the player and 2. Giving output to the player (This includes drawing the gameworld, producing sounds and any other feedback). There is other things but that is the main things the client handles. Pretty much everything else happens on the server. The server will contain the gameworld and send the information needed to complete 2. (Rendering, audio, ect) to each client.
So in your case of client1 firing a projectile it would probably go something like this.
Lets say that both client1 and client2 are facing each other and are about 10 meters away from each other. Client1 presses the left mouse button, the client recognizes that this button is mapped to firing projectiles. The client then sends a request to the server that client1 wishes to fire a projectile, the server will take care of checking whether client1 can fire a projectile, if it can spawning the projectile, adding it to the game world, ect ect. So let’s say the server decides it is possible for client1 to fire a projectile and has spawned and added it to the gameworld and everything else. On the next frame of the game when the server sends out the information to each client it will send the information to draw the projectile, any sounds it might make, ect along with all the other data that is needed to output the game world (From that client’s point of view) to both client1 and client2 (Remember they are both standing next to each other so both can see the projectile).
Though then again UE4 might do things a bit differently or totally differently from this so don’t take this as “This is exactly how it is done in UE4”. I just thought maybe a general overview of how a lot of client/server games handle things might help. Maybe someone more experience with the UE4 networking model might be able to give a more concrete answer to your questions.
Hopefully this was able to help a bit and if you have any questions about anything I mentioned feel free to ask either through this post or through a PM. Anyways wish you the best of luck with your project.