This issue most likely affects 4.16 too.
Basically I can’t use pre-built LODs as UE4 doesn’t render them. Engine forces me to generate LODs in the Editor.
Here is the video explaining the issue:Initially LOD1 wouldn't render either. What I did was I set Percent Triangles to 0, Applied changes and LOD1 vanished and was automatically removed. Then when I did the same trick with LOD2, UE4 crashed. After restarting, I was able to load LOD1 freely, as seen on the video, but had no luck with LOD2.
My project is coming from way way back, and static meshes with pre-built LODs still work. However, if I want to update meshes (I did some changes to source FBX files), or import them all over again - I am out of luck and essentially I can’t continue with the project without being able to load existing LOD meshes.