I can confirm Adobe Photoshop can definitely handle all of 8-, 16- and even 32-bit data per channel for both RGB and Grayscale modes:
Note though that the max image size could be limited to available RAM or even VRAM when working GPU-enabled in my experience. I would start with smaller resolutions 1024x1024 first, then 2048x2048, to tests your approach for importing as 16-bit grayscale PNG Heightmap in UEFN.