Metahuman animation editing in Sequencer causes distortions after baking

Hello,

I am working in UE 5.8 using metahuman and video-based markerless AI mocap. My metahuman has virtual IK bones. Everything worked fine until I decided to clean my animations in sequencer. When I edit my anims in sequencer and bake them as Anim Sequences, they stretch my skeleton on a Z axis. I tried everything I could think of and searched online but I don’t undertsnad what causes this. I do have virtual IK bones on my MH, is that not enough? What can cause this issue?

In the sequencer itself nothing looks distorted, only when I bake the animation to Animation Sequence.

Any tips would be very much appreciated, I have absolutely no idea what is going on here.

On another note, in my AnimBP I do not use the Metahuman Control Rig. I am using custom control rig with my virtual IK bones. Is that the problem?