This appears to be very reminiscent of reminiscent of this artifact, but the solution does not solve this issue. Decal Actor User Guide | Unreal Engine Documentation
Step 1) Switch to Forward rendering
Step 2) Change AA to MSAA
Step 3) Create a decal with a transparent and opaque area such as the one above. Ensure the bounds exceed the vertical height difference between the two objects.
Step 4) Create two brushes, raise the second one slightly and make it be partially covered by the decal as shown above, set receive decals to false.
Step 5) Set MSAA samples to 4 for most noticeable result.
Project displaying this.
It appears that AA is applied as though the surface is receiving decals, even when it isn’t. Is it possible to work around this, as this makes decals under Forward Rendering, and MSAA borderline useless.