I hope this is not by design. I saw this issue when i tried to spawn an object above the character. My system update was right after physics step inside FixedStep Sim Group.
You need to override the behavior of BufferInterpolatedRigidBodiesMotion see BufferInterpolatedCharacterControllerMotion in the sample
I’m trying to set LocalTransform but when I add a RigidBody, it doesn’t work anymore. I think my problem is very close to your problem…
Not sure what I’m suppose to do.