Initially this code was working from constructor of a class derived from ACharacter:
auto capsule = GetCapsuleComponent();
capsule->OnComponentHit.AddDynamic(this, &APhageCharacter::onHit);
capsule->BodyInstance.SetResponseToChannel(ECollisionChannel::ECC_WorldDynamic, ECR_Overlap);
After encountering wierd problem with Behavior Tree not running I created copy of the class with different name. This solved the problem with Behavior Tree (?!!!). However OnComponentHit stopped working. So I returned to original class. After some experiments it turns out that APhageCharacter::onHit is always called on hit. Even after removing call to AddDynamic(this, &APhageCharacter::onHit). Renaming function to onPhageHit causes OnComponentHit to stop working. Even with proper call to AddDynamic.
I am completely lost and can not get working OnComponentHit events.