Quest 3 Multiplayer Issue: Avatars and Network Objects Not Syncing (Meta XR Blocks + Photon Fusion)

Hello,

I'm developing a simple multiplayer app targeting Quest 3 with the following requirements:

1. Players should see each other's avatars in the multiplayer space.
2. Players can interact with rigid objects (e.g., painting on walls), with interactions reflected across all clients. (The "painting" feature already works in single-player mode.)

I'm using Meta's Multiplayer Building Blocks for this implementation as it should be sufficient for my use case.

Problem

When running the app simultaneously on two Quest 3 headsets:

• Each player sees their own avatar clearly.
• Players do not see each other's avatars.
• Networked interactions (e.g., grabbing objects or painting) do not synchronize across devices.

Project Setup & Versions

• Unity: 6000.0.51f1
• Meta XR All-in-One SDK: 77.0.0
• Photon Fusion: 2.0.6
• Meta Avatars SDK: 35.2.0
• Quest 3 Firmware: 78.0.0.961.284

XR Plugin Management

• Using OpenXR (Meta Quest Feature Group enabled) [As Recommended by Meta SDK]
• Oculus XR Plugin is disabled
• Unity warning shown:

"The Oculus XR plugin isn't enabled from XR Plugin Management in Project Settings"

Building Blocks Used

• Camera Rig
• Hand Tracking
• Auto Matchmaking
• Networked Avatar
• Networked Grabbable Object (for testing)

Configuration & Setup Steps Completed

1. Added Photon Fusion App ID in Photon settings.
2. Added Meta App ID in Oculus Platform Settings (for both Rift and Quest).
3. Set up Unity Platform Credentials for test users.
4. Application compliance approved in Meta Quest Developer Dashboard.
5. Uploaded build via Meta Quest Developer Hub; using the same build on both Quest headsets.
6. Verified no entitlement issues from MQDH logs.

Problems

• Multiplayer does not sync (avatars invisible across users).
• Networked interactions appear local only, with no synchronization.

Note

Multiplayer does work when tested between a build in Quest 3 and Meta XR Simulator.

---
What could be causing this issue?

Any suggestions or pointers on why multiplayer synchronization (avatars and network objects) isn't working would be greatly appreciated.