im having the same problem till today in UE 5
instanced mesh collide well with the rigged (( Car Body )) ,
but not with the wheels of the car,
the wheels go inside the ( instanced mesh Floor ) and stock there , they spin when you hit the forward key
they rotate as well but they inside the floor and the car can’t move
the same mesh when using it alone without instance the car wheels run normal on the standard mesh
when i enable visible collision in the viewport you can clearly see that normal meshes have collision and instances does not
in this model the generated instanced meshes are on the right side of the screen
the normal mesh are the one in blue color , which a color created by the " visible collision option"
i have tried every possible scenario i can think of nothing works