I notice in 4.27 there's a change looks like where the issue is from

" * Cubemaps generated from .hdr long-lat sources were being strongly blurred in cases when mipmaps were enabled. This happened originally because such cubemaps were intended for use only with the "Ambient Cubemap" lighting feature, and their mips were generated using angular filtering. Skylights now have many mechanisms for visibility and shadowing, causing that feature to become obsolete. Angular mipmap filtering for long-lat textures is disabled, and therefore mipmaps for cubemaps no longer introduce significant blur."

Steps to Reproduce

In Staticmesh editor open the Preview Scene Settings panel
Disable Skylight, Directional light, Only apply Ambient Cubemap as a light source in its PP settings
The Sphere's lighting looks very blocky and pixelized
See the images, in 4.26 it's all good;
[Link Removed]
but in 4.27 it's bad
[Link Removed]

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Won't Fix
ComponentUE - Rendering
Affects Versions4.27
Target Fix5.0
CreatedSep 19, 2021
ResolvedOct 5, 2021
UpdatedOct 5, 2021