Bent Normal Compression, is blue channel needed?

https://docs.unrealengine.com/en-us/Engine/Rendering/LightingAndShadows/BentNormalMaps

In the UE4 example scene it appears from their Bent Normal thumbnail that they are plugging in a Bent Normal Map using Normal compression (which discards the blue channel). Is this correct, or should bent normals utilise Linear Color space & Default compression to retain the blue channel, or can UE4 recompute that direction on the fly like it does for tangent space normal maps?

My assumption is that the blue channel can be reconstructed since the epic example seems to be doing so, but if so is it incorrect to plug an RGB map into the bent normals input? The use case for this would be lower quality compression (BC1) but slightly lower memory usage overall for the Bent Normal.