Quick answer: Unreal physics asset bodies misaligned after a vertex blend rebake? Bone indices shifted; physics asset still references old indices - re-bind in Phys Asset editor.
Skeletal mesh: rebaked vertex weights. Physics asset's body offsets are wrong.
Re-bind in editor
Open the phys asset; right-click each body; Re-bind to current skeleton state.
Or use 'Reset to Skeleton Pose'
One-click reset; body offsets recomputed from current skeleton.
Or never share skeletons
Each character has its own skeleton; rebaking one doesn't affect others.
“Phys asset bone indices cached at creation. Skeleton edits don't auto-propagate.”
If you share skeletons across characters, the per-character physics rebind is non-optional after skeleton edits.