[Vince]

Had this happen, too. Probably the actors stream in before the surface they're supposed to spawn on streams in, so the actors fall through the ground. Then the game engine respawns the actor on the closest sidewalk node. If you connect the three positions in your screenshot you can see that the path it creates follows the sidewalk.

This is pretty much the same thing that happens with vehicles suddenly spawning in the middle of the road. Very annoying, but I don't think it can be fixed, unfortunately. You could try placing a flat object with a very high drawdistance underground to give the actors a surface to spawn on.