I stumbled through this as well on my mega challenge and found some scattered resources on the Reddit for a solution and wish I came across your post first. I used the physics asset in order to enable PointDamageEvent.HitInfo.BoneName to specify the bone name of the point damage event instead of “NONE” which is what happens without the physics asset. I encapsulated the bone matching behavior and applied a damage multiplier to the base damage such that a head shot would result in enough health damage to kill the enemy, etc.
Didn’t realize you can get the physics material as well. WIll try that out in my polishing phase.