Client loses input after doubling the amount of physics objects in the level

After doubling the number of physics objects in the level the client loses input/ignores input

1. Download the attached project
2. Open the project
3. Play in editor with (2+ players)
4. Select the client
5. Move Character around

Result: The character on the client does not move (when using the server the input works as expected)
Expected: The Client would move around in the same manner that the server does

Character input stops working in multiplayer when I double the amount of replicating physics objects