You need to redownload assets via UE5 for them to be usable. They made changes to the assets for UE5.
From Quixel Support:
You should have no problems at all changing your Local Library! However, I believe your already downloaded assets from the Bridge desktop application will not sync into UE5, so you’d still have to re-download the assets from within Bridge in UE5 as they have been specifically altered to give you the best experience.
By default, all the assets you download from Bridge inside UE5 are placed in the following location on disk:
Win: C:\Users\Documents\Megascans Library
Mac: ~\Documents\Megascans Library
Linux: ~\Documents\Megascans LibraryTo change this path, click on the user icon in the top right corner of the Bridge window and select Preferences.
In the Preferences dialog enter the path that you want to save your assets to and click Save.*This path is the same as the default path for the Bridge desktop application.