The TTP for this was #333611, and was fixed back in September (with CL 2280605).
I think the piece you may be missing is tagging the property/variable “Instanced”. “EditInlineNew” more or less says “this class can be instanced”. You can prevent sub-classes from being instanced by tagging them with “NotEditInlineNew”.
There’s a bug it seems, where variables of a EditInlineNew class show up in the defaults, even when the variable/property is not marked “Instanced”.
To get the behavior that you expect, you can mark the property like so:
UPROPERTY(EditAnywhere, Instanced, BlueprintReadOnly)
UTest* MyUTestVar;
Once the variable is marked “Instanced”, you won’t see a button, but a dropdown where you can pick the class type for it to instantiate. If you pick a class, all its defaults will then be exposed for you to set.
Unfortunately, you cannot mark Blueprint created variables as “Instanced”. I’ve created a bug to allow this (UE-6959, for reference).