Why does my FPcharacter capsule component float over ground?

I used FPS template for my character movement and I scaled down the character to the size of an ant, but character capsule component is not really on the ground. Why is this?
Character scaling is set to 0.01 (XYZ)

This makes problems with collisions and another problem where character falls too much after jump and then resets to where it should be (second screenshot).