Ok, so you can create separate physics spaces using SubViewports. Something I didn’t think about when answering this question: How to Make Instanced Dungeons in Multiplayer?
I would recommend this over going low-level and trying to manipulate the PhysicsServer yourself - at least at first. See if SubViewPorts will do it for you.
The easiest way though, is just to make each section of the game world in its own physical space in the game world. Then no need for SubViewports