So i messed around with this for a bit was able to get your problem and this is how I fixed it, in stead off Game mode change it to Game And UI, I am not 100% sure that “game only” mode doesn’t listen for the mouse correctly as I have had issues with getting turrets to track the mouse with this very problem.
you will want to leave the widget to focus blank and it should work fine. the hide cursor is really up to you the demo generates a actor at the mouse location anyway so you don’t need to see the cursor in this case
I hope this helps.