My windows is 10 Enterprise LTSC and already has DX12 (DxDiag) but the project config was PCD3D_SM6 changed it to PCD3D_SM5 and it started compiling shders.
if I’m not mistaken D3D11TargetedShaderFormats is the setting for DX11 not D3D12TargetedShaderFormats
Still don’t know what is the difference between PCD3D_SM5 and PCD3D_SM6
Edit: I think I came to conclusion too early, I was greeted with a message in editor that virtual shadows will not be rendered until SM6 setting is enabled (that tiny +, - in front of it)