I am also having this issue. I am running a dedicated server. The first player to connect to the server always loses their controller when a second player joins and has same symptoms as described above.
Further, if I close the hung client, their old character never disappears, it just stays there as an object/statue where collision casting no longer works.
It’s ok if more people join the server after, but the first to join always seems to get kicked/freeze. Anyway, I’m going to start really digging in to see if I can fix the issue, but I thought I’d look around first to see if anyone else has the issue.