Unreal Engine doesn’t use a fixed update for physics. It goes through the tick which means that with lower framerate you have larger collision penetrations and larger rollbacks. This means larger difference between server and client.
You can find physics framerate settings in your Project Settings → Engine → Physics.
You can try physics prediction and replication while you are there.
The network settings for position smoothing are inside the movement component:
Play around with those, mainly allow for more time to correct and larger allowances.
However, if you can make the correction in the beginning (on hit) it might blend with the initial jerk. This will require you to replicate the initial conditions or the resulting position and force from the server to the client.
Also double check the obstacle position and orientation. Maybe try with something with simpler collider geometry if its not a primitive already.