I tried with default motion controller component like you suggested and was the same.
While testing that though I noticed that it only happens on one particular map. Created a new level (and tested some of my other levels) and everything works correctly with my character, your vive character pawn and also with a blank child character of VRCharacter. Any clue what I can have done in my level for it to not be working? It’s not a problem I can just create a new level, is only a test map anyway but curious what’s causing it.