I’ve posted this question already to the UE community on reddit (found here: [UE5] Sequencer video capture not working and I’m not sure why, but I’ve decided to post here as well in hopes of finding an answer.
As seen in the image below, the rendered result from Sequencer/Movie render queue is just completely glitched out, similar to what one might find in the older versions of UE where the first of the rendered frames of a cinematic is useless. This time however, all of the frames are the same (literally). The scene looks and works completely fine within the Editor and Sequencer viewport, but the render is always a complete mess.
The scene is comprised of several different Megascans meshes using Nanite and Lumen, along with a simple landscape that has a Megascans surface material applied to it, Post Process Volume, Exponential Height Fog and some lighting components. All in all nothing special.
I also tried rendering a test scene with only one Megascans asset and no camera animation and the scene rendered out fine. Both Nanite and Lumen were enabled in that test, so I’m not entirely sure where the problems resides.