Blueprint Actors do not respect Rotate to Surface Normal Rules; in Editor's Viewport Snapping Options
The surface normal rotation handling comes from UActorFactory, and in all the cases where items are being dragged in the viewport, it's handled in LevelEditorViewport.cpp using the UEditorEngine::FindActorFactoryForActorClass method, which always returns NULL for Blueprint classes.
Licensee proposed patch has been attached.
Result: it snaps to the surface, but doesn't rotate to the surface normal
*Expected: *To compare, drag a regular Static Mesh into the same level with the same settings - notice that this actor both snaps and rotates to align to the surface normal
There's no existing public thread on this issue, so head over toAnswerHub just mention UE-78886 in the post.