It turns out that the problem with jitter was specific to my project. The camera and actor rotation has been updated in actor’s Tick() function, while setting the rotation of a bone in animation blueprint to match the camera’s rotation via “Transform Bone” node. Once I relocated the camera and actor rotation logic in input handler function (for “Turn” input axis) everything returned to normal and there is no twitching and jittering.
Now, I guess the former setup was ok in Unreal 4.8 somehow but on 4.9 this became unstable because of some change of the way the animation updates. So now the latter setup works because it always executes first (before actor’s Tick() and animation update). Either way I’m happy this problem is resolved. 
Thank you for your help!
Milan