Hi Roman -
The issue is in draw calls not vertex generation. In an instanced static mesh there is a shared material and one draw call, so you may be generating 10,000 meshes or nearly 80,000 vertices (if their cubes) but you only have 1 draw call. Therefore a fast performance, unfortunately this method rendering is not supported in OpenGL infrastructure used in most mobile devices.
I believe this issue you guys are exactly experiencing is a matter of rendering lightmaps over top of one another. So, basically you substantiate the objects and set them to hidden, but according to the engine they exist which is taking into account their placement and rendering lights one on top of another (or in your case shadows). It is this computation which is maxing out the render engine.
Try to spawn your actors without overlap, so in a straight line and see if the glitch remains and you get black faces.
Thank You
Eric Ketchum