Hello!
I created an asset with a morph target in Blender. I captured GIFs of manipulating morph targets from 0 to 1 in both applications. When the morph target is 0, the mesh is serrated. It is correct to cast a shadow through the irregularities. When the morph target is 1, the serrated form changes to a flat surface. There should be no shadows at this time. Blender doesn’t have shadows, but Unreal Engine flattens them with shadows. Why do morph targets in Unreal Engine have wrong shadows?
It seems like a normals issue.
Your 0 value morph should be the flat surface with correct normals precalculated, then the 1 value should be the extruded version.
Remaking it in the inverse order should fix it, so switch Basis and Key 1 in blender
It could be because the geometry is not smooth, or the lights are baked on the model, maybe doing a dynamic light could solve the problem, or adding some sort of smoothing before importing it into unreal