This is a very misinformed answer. Epic’s actual response about the lack of tessellation in UE5 from the rendering AMA:
To better support that path we are right now working on some ways to more conveniently and with higher quality pre-tessellate and displace static meshes.
While some of those use cases can be well covered by Nanite or virtual heightfield terrain it is well understood the power of dynamic displacement mapping. Honestly that was on my mind since the early days of Nanite development as something I wanted to eventually support in Nanite, albeit is no easy task. Research is in progress on that now, ie proprietary Nanite tessellation and displacement mapping. The hope is to create something far superior to what HW tessellation can do. That research is WIP so I can’t really say much more about it or promise anything really (research in inherently risk taking and sometimes fails) but I’ll say I am personally very excited about it and the direction its going.