I spent about 40 c4 tonight and in about 3 situations, while standing directly in front of a wall in a standard 1x1 room facing a wall, the c4 doesn't stick to the wall, it sticks to an invisible point right around where the player head is, and does no damage. It seems like the only workaround is to crouch and aim at a low point on the wall.
Next time you're in Rust, press F7 and report the bug through their built in system. This will ensure they see this issue asap.
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