I can confirm that the following procedure breaks LOD1 assets.
- import any mesh for the base LOD
- save, quit, open the editor again
- import LOD1 for the mesh (you can use the same FBX as the LOD0)
- enjoy flat-shaded, rotated mesh
UE 4.9 release.
How is it possible that a bug this huge has been unresolved and even unreproduced for almost a year ?