MRG - Actors with deformers do not deform when holdout is enabled in Movie Render Graph

Actors with deformers do not deform when holdout is enabled in Movie Render Graph

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From EPS:
We use Movie Render Graph with multiple layer output and one of the layers is used to obtain a character matte. We collect character actors using a Collection and apply Holdout Modifier, so they render as a black hole.

However, we have noticed, that with the Holdout active on a layer, the geometry does not take deformers into account, such as squash and stretch. As a result, our character matte does not match the characters on the beauty layer and cannot be used in Post. This is serious, as we render a lot of cartoony animated movies and squash-stretch deformers are very common.

Please see the attached repro project. Made in UE 5.7, but issue has been encountered in 5.8 as well.

• Download and open project attached
• Open /Game/Maps/HoldoutRenderRepro.HoldoutRenderRepro level
• Load /Game/Sequences/LS_HoldoutRepro.LS_HoldoutRepro Level Sequence
• Load /Game/MRQ/MRQ_HoldoutRepro.MRQ_HoldoutRepro Movie Render Queue
• Render Local