When using static meshes instances with LODs and vertex deformations (wind) for Procedural Foliage, none of that works (trees don’t sway and LOD doesn’t switch).
New development - I had my original static mesh of a large scale (~65 meter tall tree) and I was scaling instances down to be of acceptable height. It seems that UE4 uses original static mesh scale for LOD calculations, even though it should use scale of the instances. Scaling original mesh to be what I needed it to be solved LOD issue.
Same goes for the wind - I had to enter bizarrely large values for my wind in order for it to work (material came from one of the assets from the Marketplace). The more instances of the same static mesh was added to the level, the larger values for the wind I had to use.