Just adding to this to note that the issue persists in UE4 4.22. I’m having the same issue with a simple instanced 2d tiling grid. If I rotate the instances, 90 degrees on the Z axis for example, it seems to cause a .0001 & shrinkage and you can see noticeable gaps in what should be a seamless tile. This issue does not occur when I use static meshes.
I found this related bug report (UE-17458) but will make a fresh one just in case.
My messy workaround is to automatically add .0001 to the scale if the instance is rotated.