This is the same issue found in [Link Removed]. Foliage will not act as an occluder as expected with painted foliage.
Also reproduced in Main CL-2689138
RESULTS: Foliage Meshes do not correctly occluded as expected
EXPECTED: Meshes should correctly occluded Decals
**Quick Repro - Open Attached Project**
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-21260 in the post.