I’ve had the same problem in UE 5.3.2.
Not sure how it looks in 5.4 as I haven’t tried it there, but generally speaking you can’t retarget skeletal meshes (whch i don’t understand why, technically it should be doable using retargeters).
TLDR: you can retarged animations at runtime from an invisible UE5 mesh to older UE4 mesh using animation blueprint.
Full version: I’ve finally went with the following structure:
BP_Character (Actor)
Mesh (standard UE5 manny)
UE4_Mesh
Head
Chest
Arms
Legs
In the construction script I have used “Set leader pose component” where targets are “Head”, “Chest”, “Arms”, “Legs” and “NewLeaderBoneComponent” is “UE4_Mesh” (standard modular character setup).
In the “UE4_Mesh” animation blueprint there’s only single node “Retarget pose from mesh” with “Use attached parent” checked (Runtime retargeting from UE5 to UE4 mesh).
The default actor mesh (standard UE5 manny) controls all the animations, ik rig, etc.
Both UE5 manny and UE4 manny have “Visible” set to false and “Visibility Based Anim Tick Option” set to “AlwaysTickPoseAndRefreshBones”.