Hi Matt!
Thanks for the reply, to answer your questions. This geometry is simply being imported from FBX or other sources and not modified in the engine (aside from Nanite being turned on). So we are basically just converting it to USD as part of the export process without any changes done in the engine. There is indeed post-process being done, I wrote my own USD exporter, but we do leverage the USD export tasks for meshes and materials to include in the stages we create.
I think your comment about the export being literal to the mesh is a totally fair one. A lot of the meshes do not have LODs (and one can argue that this would be the proper way to handle lower-resolution proxies), so that is why I was leveraging nanite as a way to get some triangle decimation for these meshes. It was simply a matter of convenience for artists (especially when getting the source scenes from vendors) so that we can get USD scenes with proxies regardless of whether someone had authored true LODs.
I may very well look into the multiple LOD exports as a replacement for the current nanite solution (especially in 5.5 when I can use the source geometry option) for meshes that have them. However, there may always be some that do not have LOD and we still need a solution for that. I was hoping that since clearly the engine does have the ability to do some decimation (as nanite is doing this), we could leverage that directly in the USD export itself too.