@Peter_Gusev So I tried going through the steps again to remember how I did it, and I didn’t run into the same issue again! Weird 
Timeline of my vain efforts
Cloned UE5. Nah JK, git clones are slow as, downloaded a ZIP of the UE5-main branch, which is the most up to date one
./Setup.command - ran fine, took ages
./GenerateProjectFiles.command - ran into a dotnet issue (library loading disallowed by system policy)
Fixed by cd Engine/Binaries/ThirdParty/DotNet/Mac/shared; xattr -d com.apple.quarantine Microsoft.NETCORE.App
ls showed the XCodeProject was generated
This is where the fun really starts. ■■■■ I hate XCode. Changed the build settings to use New Build System, and to target My Mac, not Rosetta. This failed, as eventually some things popped up that could not compile to ARM.
I do remember when things crashed and burned, the following command might have helped, or something of that sort:
(export "xcodebuild -version"="12.4.1"; ./GenerateProjectFiles.command ).
The syntax looks off to me though, so not sure if I had a different invocation somewhere, but basically exporting a string into an env var, which prevents xcodebuild from returning the actual version. Again, not sure if this was the actual solution, or just a dumb idea I had from too much Python hacking around at work.
Seems like Epic have made the latest UE5 version play nice with XCode 13 and beyond. I might leave the build running tomorrow and report back with more concrete results though.