That does appear to be the case, yes. Pink means missing from surface cache coverage, if you’re using hit lighting it’s a slightly different story, but by and large, yes. If you want it included in lumen (up to a range of 1km), then you’ll need HLOD.
For as much as I’d really like new graphical features in the pipe for lumen, I think simplifying the HLOD setup would be extremely appreciated. As it stands, the complexity of configuring and visualizing the system often makes it prohibitively difficult to use for smaller projects. I’m often making smaller scenes and tests, and (however challenging this would be to setup), I would love a simple ‘generate HLOD’ button to quickly capture Far-field detail into a scene.