Skeletal Mesh collision set to 'Query Only' still generates physics collision

The query only means it will generate overlap events,. Physics means it will generate hit events. If your mesh is set to Block All then collisions and physics will still work the same,. The event just won’t be fired in the opposing blueprints. You need to make sure your skeletal mesh is set to overlap all or ignore all to get your desired results. Also make sure there’s no other components with collisions. If you have a character the capsule will have separate collision settings than the mesh.

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