Skeletal mesh misaligned for clients when replicated

I have a Character that has a skeletal mesh and a Child Actor Component with it’s class set to the class of my weapon that also has a skeletal mesh (as a root component). If Component Replicates is set to true by either changing values in Child Actor Component’s instance’s Child Actor Template or by changing default value in the weapon’s blueprint the weapon’s mesh get’s misaligned on clients, strangely however when Component Replicates is set to false then the weapon’s mesh is in the proper place. Am I missing something or is this a bug? Replicate movement is marked for both the template and the blueprint itself.

I’m attaching 4 screenshots: 2 with component replication on (server and client) and same for off. Oh, and the floating mannequin in the A-pose is the “weapon”.