By investigation/chance, I managed to find a workaround.
Given that UE5.5 HISMs were broken with no feedback on when it would ever be addressed, I wondered if either ISMs, ISM batching, or HISM batching were equally broken.
With very low expectations, I swapped all my HISM components with equivalent ISM components, and to my surprise - the HISM rendering issue went away?!
I didn’t even bother to test the batching alternatives; I was happy that my 15 minute investigation actually solved my problem so easily. I don’t know why I didn’t try ISMs months ago, but probably because I was waiting for feedback/resolution from the devs.
As far as I know, the difference between ISMs and HISMs is the latter uses LODs.
HISMs are good for mesh instances (e.g. building, tracks, etc) that span large distances and you want the distant meshes to render with a lower LOD for better performance.
Luckily, my asset doesn’t need LODs at all so ISMs saved the day.