Foudn the answer - thanks to UE being open source!
I’ve looked at the github code and found where it was taking the path from; it was the following registry key:
HKEY_LOCAL_MACHINE\SOFTWARE\WOW6432Node\Microsoft\VisualStudio\SxS\VC7
which inside of it was an entry named “14.0” with the non-existing path.
I deleted it, created a new one with “15.0” with the correct path ( “D:\Program Files (x86)\Microsoft Visual Studio\2017\Community\VC” for me ), restarted the editor - and it now works.
p.s.
The above registry key path is just the third path UE will look for; the correct order is:
1. HKEY_CURRENT_USER\SOFTWARE\Microsoft\VisualStudio\SxS\VC7 2. HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\VisualStudio\SxS\VC7 3. HKEY_CURRENT_USER\SOFTWARE\Wow6432Node\Microsoft\VisualStudio\SxS\VC7 4. HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\Microsoft\VisualStudio\SxS\VC7