=== Repro Project ===
1. Open the attached project
2. Select actor BP_ModularCharacter
3. Menu Bar – Actor – Convert "BP_ModularCharacter" To Static Mesh
4. Save and open the resulting static mesh
5. Note how the leg mesh of the character is correct in LOD 0 but contains garbage on other LODs.
=== Blank Project ===
1. Start with a blank project
2. Import skeletal meshes for a modular character, such as those in "Stylized Character Kit: Casual 01" ([Link Removed])
3. Set up a modular character using the "Leader Pose Component" method, as described here: ([Link Removed])
3.1. Make sure that at least one of the non-leader components contains a skeletal mesh with more than 1 LOD
4. Place the character in any level and select it
5. Menu Bar – Actor – Convert "..." To Static Mesh
6. Save and open the resulting static mesh
7. Note how mesh LODs higher than 0 and coming from non-leader components contain garbage.
SkinnedMeshToRawMeshes(USkinnedMeshComponent * InSkinnedMeshComponent, int InOverallMaxLODs, const UE::Math::TMatrix<double> & InComponentToWorld, const FString & InPackageName, TArray<FRawMeshTracker,TSizedDefaultAllocator<32>> & OutRawMeshTrackers, TArray<FRawMesh,TSizedDefaultAllocator<32>> & OutRawMeshes, TArray<UMaterialInterface *,TSizedDefaultAllocator<32>> & OutMaterials) Line 357 C++
FMeshUtilities::ConvertMeshesToStaticMesh(const TArray<UMeshComponent *,TSizedDefaultAllocator<32>> & InMeshComponents, const UE::Math::TTransform<double> & InRootTransform, const FString & InPackageName) Line 623 C++
FMeshUtilities::ConvertActorMeshesToStaticMeshUIAction(const TArray<AActor *,TSizedDefaultAllocator<32>> InActors) Line 6446 C++
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-247052 in the post.