AOE magic spells / etc is the only time when you should be letting the Server do Hit Reg in my opinion and letting the client do hits is fine if done correctly.
If you do Server Hit Reg on melee and gun type weapons, it results in a noticeable delay between the client’s perception of the hitbox and the Server’s, leading to lackluster and “un-crisp” gameplay, but the problem with using client-side hitboxes is that it becomes literally impossible to stop an exploiter from changing the size of other players hitboxes on their client.
Luckily, you are able to do server-sided checks, to heavily decrease the the effects of this.