In my case, HMDPawn BP has UsePawnControllerRotation enabled for a CameraComponent: Screenshot by Lightshot
Location of the HMD is updated from live motion capture data.
Note: If I enable an option LockToHMD, there will be no lag, but it is a not a solution for me because it ads an unnecessary HMD location displacement.
Note: Everything was working fine in UE4.19 and no changes were made to Pawn or PlayerController.
P.S.
We are using Oculus HMD