I use unlit materials for characters. I take the atmospheric light (direction / sun) vector and the normal vector, get the DOT product, use it to “select” an intensity in a LUT. Then I multiply the colour by this LUT. It’s cheaper, no illumination + post-processing.
It would be amazing to have something like this built-in but Unreal is all about “realistic” lighting.
This post started may 2023. its dec 2025 now and instead of seeing an improvement, all the issues you mentioned got actually worse.