How to use Light Weight Instanced Static Meshes with PCG?

First.
If the landscape foliage system for the version you are on does instance batching you’d use that.

Second, what you use most definitely matters.
Placing actors implies ecah actor implicitly ticking /having a tick group/having a bunch of overhead.
Having an instance does not.

Third.
You replace what you interact with at runtime. As seen in this: