As in the topic - turn off Use Pawn Rotation on First Person Camera. Still when you move your mouse character is rotating in Pitch axes. Yaw is indeed blocked…
Probably the problem is related with another problem.
Take a loop that will set controller rotation over some time. During this time move mouse to the right. After the loop finish - character will change rotation, not to the last setup of controller rotation but to some mouse movement that happend earlier.
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