Very nice post! Thanks for giving video evidence. This issue seems to be server-side, as arrows seem to work on other servers. Try shooting with different bows/arrows to see if you can squeeze any damage out. Is PVP enabled on the server (You’d be surprised how many moderators turn off PVP as a prank.)? If nothing works, try rebooting the server.
I have been having the same problem but with quest. If you fix this it will be a light saver because Alot of people use arrows.
PvP is on, its not just players but also enemies and its random, like you need to shoot a wyrm 10 times to kill it with a arrow that should kill it in 2 hits and stuff like that, the hit dedection is very bad for ranged.