DFAO with characters

DFAO and TemporalAA both use “earlier” rendered frames. This causes blur and ghosting effects. Atleast TemporalAA is ****** implemented in UE.
Don’t know why DFAO needs multiple frames.
Try to disable TemporalAA or both.

DFAO does not work for skeletal meshes though, because Skeletal Meshes don’t generate Distance Fields. If you want to use this mesh for a character, DFAO won’t work.

There are many options you can tweak for your outdoor scene.
I usually use a more unsaturated Directional Light colour with RayTraced Shadows.