I don't think hit registration is actually the problem. I was playing Local Play earlier and had zero issues killing people.

I think the problem is desync. Right now it feels like I'm shooting the wall behind an enemy in online play and not actually hitting the enemy. It's less noticable in Cooperative because bots don't really move that fast, but in PvP this kills a lot of people. I'm getting bad flashbacks of Escape From Tarkov with the current online gameplay.