Hi,
First, read this: Animation Retargeting (Different Skeletons) | Unreal Engine Documentation
It pretty much describes the problem exactly and shows how to quickly put both characters in the pose you want (A or T). It takes 30 seconds. NOTE: you can change poses on BOTH skeletons. Not only yours, but also on the animation source skeleton.
Now, what and why is actually happening:
It appears that Epic’s default skeleton was modelled and skinned and exported in A-pose (someone from Epic staff may correct me if I’m wrong). A-pose is a terrible pose for retargeting, because in A-pose, it is very likely that one character will have the arms in, for example, 45 degrees and the other will have them in 42 or 50 degrees. You can never tell, because you don’t have both characters in one viewport. Therefore, it is waaaay easier to just put all your characters in t-pose, which ensures that the angles of the arms are the same on both skeletons (absolutely horizontal).
Industry standard is T-pose. Maya, Motionbuilder, 3ds max, blender and all other animation programs in the world use t-pose. Mocaps are recorded using t-pose (actors literally stand in t-pose for retargeting). In conclusion - you should always use t-pose to get best retargeting results.
But of course, this is gamedev and you can do what you want. Only end result matters to the player 
P.S. So where A-Pose came from? Becasue A-Pose is the most natural position to MODEL and Skin (paint bone weights on mesh) a character. But T-Pose is the best position to rig (add IK handles, constraints etc.) and retarget a character.