I know this is old but in case anyone is struggling with this like I was here is the overcomplicated solution to fixing vertex snapping (unreal 5.4):
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MMB (MIDDLE mouse button) on the center of the pivot point when you see the four way arrows pop up. You will get the grabby hand icon when you have successfully done this.
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While continuing to hold MMB, click ALT + V. Hold these down together for the remaining steps. Do not release them until done.
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Release MMB. Yes, this is correct. It will not work if you continue holding MMB at this point you need to re-click exactly as stated in step 4.
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The part I discovered that fixed it for me: move your mouse over one of the arrows (x,y,z axis arrows, the blue red and green ones) as it will not work at all if you keep your mouse over the center of the pivot point because this seems to confuse the whole system. You can now freely click and unclick MMB (continue to hold ALT + V entire time) to change the axis you want to use and this will actually cause the blue vertices to appear and you can move to them.
Still finicky even when following these instructions, but it is about 90% of how I would expect it to work if done properly.
Hope this helps as it was a pain to experiment with especially being new to Unreal.