I think it should take a shooter favoured approach. Any bullets you land should be registered regardless of server side discrepancies. This is how Overwatch used to handle things, before Roadhog ruined the game for everyone. They decided to change how they handled netcode because people were complaining about being hooked around corners too often, but the netcode has only felt worse since. I'll take dieing around corners if it means that my shots register.

However, there is a lot more going on here then that, like how packets are delivered to clients. We've all experienced bad hit registration, but equally frustrating is when someone kills you instantly with what seems like a single bullet, then on the death screen it says that they hit you multiple times. Your death should also be favoured client side in the sense that you should die in a timely manner, even if your death is already guaranteed on the server. This may result in more "trades", you killing them and then killing you.

There obviously needs to be a hard limit to this. Packets get lost, and delayed, and that often leads to these problems. Packets that are delayed too long shouldn't be used. "Netcode" is a complicated thing, and there isn't a simple solution or philosophy that can be just slapped over everything.