Steps to reproduce the above issue:
Step 1: Create new “Games/Blank” blueprint project
Step 2: Enable virtual textures, and virtual texture lightmaps, and hardware ray tracing.
Step 3: Set targeted RHI as Directx12 SM6
Step 4: Restart engine to rebuild shaders
Step 5: Make new “empty level”
Step 6: Add Static directional light, static height fog, static sky atmosphere and static skylight.
Step 7: Create two cubes, Scale (X=25.000000,Y=25.000000,Z=1.000000)
Step 8: Raise one cube 200 units above the other so there is a gap between them.
Step 9: Create a new material with a simple vector 3 color, apply and save.
Step 10: Apply new material to top cube
Step 11: Start GPULightmass bake.
Result: Top cube does not cast a shadow on the lower cube.
I have submitted an official bug report. It would be great if others could test this and let me know if you can reproduce this.
Hoping epic can figure this out and give us confirmation it will be fixed for 5.4