Hopefully my answer will turn your taco frown into a smile.
Unlike the UDK license (which prohibits objectionable and offensive content), the UE4 EULA is more permissive. You’ve identified the right part of the EULA - the relevant question is whether the use is lawful. As for which laws apply, it’s the laws of the country or jurisdiction of use (that includes development and distribution).
So, the EULA does not prohibit pornographic content per se, so long as it is lawful. I can’t give you legal advice on that end, but I think it’s too strong of a statement to say that porn isn’t illegal anywhere in the world, and even in the US there are some restrictions.