Ue4 is not truncating any weights. Can you imagine the amount of complaints that you would see here in the forums if that was the case?
Neither is blender. The data is written to the FBX as is.
As I showed in my screenshots the view in blender is far from perfect. It shows the very same kink present throughout.
You can delete the edge loops in question and re-extrude if you want to be sure about the assigned weights.
then just bridge the last 2 edge loops together and re-weight paint the section manually.
Other then that, there is nothing else that can be the “cause” of this.
The best questions one can make are:
“where did the original mesh come from?”
“did you modify and adjust the problem area?”
And
“Can you use a different mesh that actually works as a starting basis to model upon?”
If the first answer is I made it from scratch, then the assumption is you made it wrong. It happens.
If you got it from somewhere else, they made it wrong. It happens too.
If you got it from somewhere else and modified the arms, that’s probably when the loop was altered.
The last question is just for you to answer.
if that’s an option, start from scratch and test the arms being raised before changing anything at all.
that will tell you immediately if the mesh is fine or not.
As a side note. Body meshes are generally mirrored and X dominant.
given you are working on the left hand only I would assume the right hand has the very same issue and was the part that was originally modeled if you downloaded a starting mesh from somewhere.
My 2 cents, delete the edge loops. There is no way you need more then 10 in an arm section when you do things anatomically / properly.
unless your intention is to sculpt the normals, in which case what you have needs to be subdivided another 200 times or so and sculpted with pitting for the skin…