Thanks for the answer!
I actually made a mistake, its not a ‘local’ coop game, just a coop game.
I still do not understand how should I handle trace for checking if the object we are looking at is interactable. Seems like an overkill for server to trace each character and send an event when client is looking at something that can be interacted with.
Is there a way to do it locally only, for the owning pawn?