Hi
This is a known issue with the Oculus DK2. It is not specific to UE4, but is related to the nature of the Oculus head tracking. Essentially, using UE4 to control the head/view while in the Oculus will cause users to experience disorientation (aka Sim Sickness). Because of this, we do not by default limit the movement of the head.
What you could do to circumvent the issues you are seeing is either MattOstgards’ suggestion of fading the screen to black or you could design your game around it with extra wide collision volumes. With wider collision, you will not have to worry about a player sticking their head out of a wall without getting outside of the Oculus’ camera’s tracking area.
Let me know if that helped.