Hierarchical Instanced Static Meshes are partially ignored after building the navigation mesh. This is causing the navmesh to be generated within all or part the HISM instead of around it.
This issue was reported and tested in 4.21.2 (CL-4753647) and was reproduced in 4.20.3 (CL-4369336 )and 4.22 (CL-4862710)
Results: The hierarchical instanced static meshes are ignored and navigation is generated through the mesh
Expected: Navigation is blocked by the hierarchical instanced static mesh
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-69472 in the post.