In the situation below, adding a cylinder and then walking toward another character causes them to get stuck differently than without the cylinder. Is there a way around this?
Extend the radius of the capsule collider and turn off collision for pawns on the cylinder.
The only way you could get the cylinders to not get stuck would be maybe by turning on CCD on them (continuous collision detection), though it is not very performant.
Most character clothes / items should probably have turned off collision and just be visual representations.
You could also have the situation where 2 characters spawn within their own collisions. If so just add a second “player start” and set it at a far away distance so that the 2 players do not overlap.