ok what foxed me about this process was the final step(4) which I got wrong
1. Set up the Chest with the backpack
2. Then set up the HMD with the clip, remember for Unreal to name it exactly:
3. Now with an assistant get them to stand with feet and hand markers and wearing the HMD and BP.
4. Simply select the HMD and BP rigid bodies from the list and then hit Create to make the character. It automagically adds in the hands and feet. Adjust pivots after.
The Optitrack official guides: