@esantanche’s solution worked for me. Installing newer versions of UE via Launcher does not seem to prompt it to retrieve newer versions of Lyra if an older version is already present, with no way to download a new one without telling it to remove the existing one.
I observed this by looking at the VaultCache directory (located at “C:\ProgramData\Epic\EpicGamesLauncher\VaultCache” for me) and finding that there was initially only one version of Lyra, “Lyra_5.3”, despite my attempts to create a project from it for 5.4.
Hitting the dropdown arrow on Lyra in the launcher and selecting “Remove Local Content” let me remove it and then re-download it and pick the editor version I wanted for, which resulted in the “Lyra_5.4” cache being created and is now usable in my 5.4 installation.
The original folder for Lyra_5.3 is still there, so it seems like removing it doesn’t happen immediately, contrary to other assets.