I can’t speak for Epic, but if we were to do this, we would go shot by shot and animate everything per that shot in Max or Maya (camera as well) and import them to be stitched up in Sequencer. I’m guessing its more or less what they do. if there are pre-made in engine FX they will be added in engine, for physics they can be pre-baked if need be which they most likely will for cinematic shots.
Straight forward actually.
The tricky bits would be any required seamless transitions from gameplay to cinematic shots especially the ones where the camera doesn’t “cut” to the cinematic but transitions smoothly to it.