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I lowered the limit but that naturally scales down the crouch distance,

If you still have trouble, set a height that's higher and then just press reset with the headset at his standing height.

The game doesn't calculate crouching from the height of the headset, the pivot point is always where you reset, that's why you have to stand straight, otherwise it just moves the floor relative to your reset.

You didn't really need the update for it, although it would still mean that he's sort of hovering above the ground that's all.