After Generating Proxy Meshes for an HLOD cluster, Force View will be enabled for it. The user will have to disable Force View to see the LOD actor's behavior in the level.
Force View is enabled for the cluster.
Force View to be disabled by default.
Disable Force View (right-click the cluster and select Force View).
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-34807 in the post.