tl;dr:
So can I have a definite answer on whether instances in Unreal Engine also have optimization features?
You want a definite answer but ask the most vague question 
The definite answer is yes.
What is that, specifically? And what are we instancing?
There’s quite a bit of optimisation that is automatic. You also have access to Instanced Static Mesh components and their Hierarchical cousins. LODs are supported. There’s also mesh auto-instancing since 4.20 (?) but whenever I try to read up, it’s a rabbit hole…
There’s also Nanite which turns things upside down.
In the end, there is no one single features that makes things the best, you’d to choose a specific tool for a specific job. Every now and then you’ll run into a cool nugget of advice. It really depends on what you’re doing.
Profiling is a huge topic in general: