Haven't really messed around with it to see how it works.Yeah that's one thing "difficult" about VR. Like leaning around a corner seems smart but does the game treat that as standing in the open? At least in a single player game you can make it smaller so players don't feel cheated.
I'm guessing it's basically just a hitbox from the headset to the ground. Not sure if it takes hand position into consideration, but I'll try messing around with it.