Issues with decal & instancedmesh rendering

Development Rendering
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1

I am using these settings in baseengine.ini to prevent decals getting invisible when in shadows:
[SystemSettings]
r.EarlyZPassMovable=1
r.EarlyZPass=2
r.DBuffer=1

After that I have new issue with instanced meshes (also hierarchical), since decals show through those. If I set use as occluder enabled in instancedstaticmesh-component, the decals no longer show through. But then when moving camera the instances blink violently. How to get both decals and instances show correctly?

108386-instanceoccluder.jpg
108386-instanceoccluder.jpg1920×1080 473 KB

108387-instanceblink2.jpg
108387-instanceblink2.jpg1920×1080 498 KB

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2

Also noticed the frame and gpu are getting 4ms hit during this (moving camera slowly in editor, not rotating). Draw stays stable and also game (which isnt run in editor).

3

I got rid of the issue when enabling Dithered LODTransition in material (and use stencil for LOD Dither Fading in Project rendering settings).

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