When you create a new NPC, it starts on your side (the client). After you place it, the NPC gets sent to the server, making it a server-side NPC. However, when you’re moving an NPC that’s on the server, the tool it’s using doesn’t fall. Only falls when I spawn the NPC on the client side.
Here’s a video. (Once I place the newly spawned NPC, it’s then set on the server, and the client one is removed)