Hi,
It seems like indirect capsule shadows are broken in 5.4. Indirect capsule shadows are an UE4 feature for casting indirect shadows using capsules for characters and distance fields for static meshes.
I’m curious why did you enable it, as in your project I see Hardware Ray Tracing, Lumen and Hit-Lighting which should make it irrelevant.
In order to disable it and fix the artifacts - either uncheck “Distance Field Indirect Shadow” on your static meshes or switch off the entire feature using r.CapsuleIndirectShadows 0.