Issues with decal & instancedmesh rendering

I am using these settings in baseengine.ini to prevent decals getting invisible when in shadows:

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?

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).

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