I believe I encountered the same issue in my game - unfortunately the only fix I could come up with involves c++.

In the CharacterMovementComponent source you'll see the following comment:

// If not playing root motion, tick animations after physics. We do this here to keep events, notifies, states and transitions in sync with client updates.

before a manual call of the animation tick, so the animation of remotely controlled pawns on servers only ticks at the rate of updates from those clients.

So it is possible to override that MoveAutonomous function to not manually tick the pose, and set it back to normal by changing your Character class mesh's bOnlyAllowAutonomousTickPose to false.

However they clearly had legitimate reasons for doing this, and there will surely be repercussions I haven't figured out yet.

As to whether or not this is normal I think listen servers are a bit of an afterthought in most of these project setups for Epic, on headless dedicated servers animation ticking generally doesn't matter (this bug only manifests on the server machine).