Hi -
Let me think you for giving me the updated project, it helped me identify the exact issue here. Unfortunately it is a limitation of the Reflection Environment. It is discussed in great length in the documentation here, Reflections Captures in Unreal Engine | Unreal Engine 5.3 Documentation, Specifically though I want to point out the issue that we are discussing:
It is extremely important to setup your scene’s materials to work well with the Reflection Environment. A flat, mirror surface will reveal the inaccuracies of combining cubemaps projected onto simple shapes. However, curvy geometry or rough surfaces can both obscure these artifacts and provide convincing results. So it is important to use detail normal maps and specify some degree of roughness on materials that will be used in flat areas.
Smooth and Curvy Geometry:
Rough and Flat Geometry:
Smooth and Flat Geometry: [This is the exact example we have set up in our test projects.]
Reflections through this method are approximate. Specifically, the reflection of an object will rarely match up with the actual object in the scene due to projection onto simple shapes. This tends to create multiple versions of that object in reflections as many cubemaps are being blended together. Flat, smooth surfaces that cause mirror reflections will show the error very noticeably. Use detail normal maps and roughness to break up the reflection.
For your particular application, I would suggest as mentioned above adding a detail normal map to your metallic Material or break up the roughness with a scuff map (think smudged glass) to help break up the cube map blending which is generating the incorrect errors.
Thank You
Eric Ketchum