LOD dithered fade-out transition does not work since UE5.4

When DitheredLODTransition is enabled for HierarchicalInstancedStaticMesh, in the previous version (5.1.1), dithering was applied during fade-in/fade-out, but in 5.4.3, dithering is not applied during fade-out. As a result, the object disappears suddenly.

It's confirmed that dithering works properly again when r.CullInstances=0 is set. So possibly distance culling removes the object before applying dither fade-out.

Based on the discussion in the internal slack thread, this might be an issue. 
[Link Removed]

1. Download the attached repro project ([Link Removed]) and unzip it.
2. Open the project.
3. Move back the camera and see objects are culled suddenly by distance.
4. Move forward the camera and see objects fade-in with dithering.

Refer the attached video; [Link Removed]

Expected Behavior: Even in the fade-out scenario, the objects should use dithering.

[UE-23848] Bug Status

"Session Disconnected" UEFN

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