A separate new flag should be used to control the sweep behavior of characters using Nav Walking behavior in CharacterMovementComponent. Existing assets should upgrade to set the value of this new flag based on the old bGenerateOverlapEvents flag. Default should likely be on (as bGenerateOverlapEvents is on by default for PrimitiveComponents).
1. Set an AI character to move using "Nav Walking" behavior
2. Observe that whether they pass through other objects (not blocking pathfinding) depends on the bGenerateOverlapEvents flag, which should not normally control blocking collision behavior.
There's no existing public thread on this issue, so head over toAnswerHub just mention UE-36546 in the post.