Hi, I had the same problem and finally fixed it, I’ve made a detailed post here: Fixed: Unreal Engine 5.4.4 install failed around 70%, IS-IN-FC02, Xcode not detected, then crash on MacBook Air M1 / macOS Sequoia
So if I had to install Unreal Engine again on an Apple Silicon Mac, I would do this:
# Make sure macOS developer tools point to full Xcode, not only Command Line Tools
sudo xcode-select -s /Applications/Xcode.app/Contents/Developer
# Accept the Xcode license
sudo xcodebuild -license
# Install Rosetta, needed by some Intel helper binaries
softwareupdate --install-rosetta --agree-to-license
# Optional but useful if Epic install fails around 70% with "file corruption" which is our exact case
sudo sysctl -w kern.maxfiles=131072 kern.maxfilesperproc=65536
ulimit -S -n 65536 && open -a "Epic Games Launcher"
Then resume the Unreal Engine installation from the Epic Games Launcher.
It took me a while to figure it out, I hope it works for you too!