SSGI disables SSAO in its current implementation of UE4 yes, but that’s not quite right. to me that’s the bug, and not the fact that you might be able to use DFAO with SSGI.
I agree SSAO has been misused over the years, since AO is just indirect lighting occlusion it’s only meant to add contact detail where only indirect lighting is present, or in other words where direct light is not hitting it. The current SSAO implementation in UE4 is true to this principle btw.
So even if in UE4 SSGI replaces SSAO there’s no reason why it should be that way. In a perfect world rendering the ambient light would be true ‘exterior’ sky light (and not a general ambience) and GI would just flood everything with that exterior light towards the interiors based on exposure (occlusion), so you’d get less and less light on interiors and closed areas from the effect of occlusion up until you can have complete darkness, and therefore AO would be unnecessary.
However due to approximation it’s very common to just use a general ambient light which in itself prevents complete darkness, and triggers the need to use AO. but just because you darken the ambient light with AO doesn’t mean you can’t also increase the light with bounces using an approximated GI.
So, if GI were to properly work with AO, the desired result should be having a general ambient light, have the AO darken it where applicable, and have the GI add more light from bounces where applicable. And of course remove some of that added AO where light bounces hit. And that should be the expected behavior in UE4 if SSGI wouldn’t be disabling SSAO, all the same as it should be the expected behavior of using SSGI and DFAO (just working at different scales). I haven’t really tried it myself though, so bear with me as this is just theory and expectation
Eventually we’ll get to a point where GI will take over and AO will be unnecessary, but in the meantime I’m convinced that game renderers should try to mix GI and AO.
Any of the current GI systems that work as an additive light bounce process (without AO) are simply not gonna block ambient light to allow dark interiors, and if you try working without a general ambient light (from a pitch-black ambient base) you’ll probably find it impossible to light everything with just bounced light from GI - everything will just be too dark. So in general you’ll probably want to mix GI and AO unless the GI system is already mixing GI and AO itself (like LPV was doing IIRC)