Objects attached to a spring arm component, moved by changes to the target length/rotation, do not have their overlaps updated.
USpringArmComponent::UpdateDesiredArmLocation calls USceneComponent::UpdateChildTransforms to update child positions but does not call USceneComponent::UpdateOverlaps
Notice that no overlap events are triggered.
The attached project also demonstrates this issue.
There's no existing public thread on this issue, so head over toAnswerHub just mention UE-86123 in the post.