I agree where you said that UE5 is still incomplete, and needs more time to progress, but I disagree with you when it comes to Tessellation. As someone explained in another forum topic related to this very same issue here, Tessellation cannot be substituted with Nanite because it is a completely different use case.
Tessellation has advantages outside of just displacing models such as smoothing the surfaces of meshes (even skeletal) and also be used to create very complex stylized animated displacement effects on the fly. All of which utilize translucency, and many other material based effects that the devs didn’t really seem to have intentions for when it comes to this Nanite feature. Nanite is just mostly designed for compression, and handling huge amounts of triangles.
The other thing is that Nanite relies too heavily on external software outside of unreal, and this means that no matter how much they optimize the actual conversion process of meshes into Nanite, things on the 3D modeling software side wont improve at all. With UE5 everything already seems like a much slower process now because 3D modeling software still has a long way to go before catching up to what UNREAL 5 can handle. I already saw this as an issue after finding out the steps that had to be taken just to get a subdivided mesh into the engine. UE5 literally throws us at the mercy of less powerful programs in order to get the most out of these features.
When Tessellation was still a factor, dealing with limits of a modeling program wasn’t an issue. On some level, full dependency on Nanite in these areas can actually become counter productive. There is no reason that both features cannot be included into the software. Epic needs to leave the choice to the developers so that we can utilize these tools how WE see fit. This is one of the biggest advantages that UNITY has over unreal right now. I left Unity and will NEVER go back, but I DO miss being able to just build whatever kind of shader I wanted, and utilize old features no matter how much the program itself kept upgrading. Sometimes it just felt like you had more control, and that’s a GOOD thing.
I feel like there is no reason to remove something that is working REALLY well especially if they cannot match what that thing could ALREADY do before removing it.