Reference
Multiplayer
How footsteps behave over the network.
Set Network Mode on the component. The default is almost always right.
Local Only
The default. Every machine works out and plays its own footsteps, and nothing is sent over the network.
Use this unless you have a specific reason not to.
Server Authoritative
Only the server works out the footstep, then multicasts the result to everyone.
Use it when the server has to be the source of truth about the surface.
Owner Predicted
The owning client plays its footstep immediately, with no latency, and tells the server, which passes it to everyone else. The client that predicted it is skipped so the sound is never doubled.
In the two replicated modes a footstep costs a few bytes. Only the state, foot, surface, position and normal are sent, and the sound is looked up locally from each machine's own copy of the database.
Dedicated servers
A dedicated server never plays sound or spawns effects, whatever you set.
It does still fire On Footstep while Evaluate On Dedicated Server is on, which is where server side reactions belong, like reporting noise to AI. Turn that off to skip the trace entirely if nothing on the server cares.
The state has to replicate
In Local Only mode, remote machines look up their own footsteps and need the state to do it.
Set Footstep State handles this for you. If you use the interface instead, make sure whatever it reads from is itself replicated.