They are replicated, otherwise this server script would not work.
The way Network Ownership works is best detailed on the DevHub: Network Ownership
However, to summarise:
- Roblox Physics is generally not handled by the server, but by individual clients
- The server decides who is the best player to give that network ownership to, based on range
SimulationRadius property tells the server how close players should be before they are considered as a Network Owner for a physics instance
- Since this value is used by the server as-is, it can’t be “bypassed” without also negating the point of this exploit.
Exploiters can still screw with Network Ownership - this won’t patch that. However it will patch them arbitrarily extending their network ownership reach to wayy beyond usual.