Instanced EditInlineNew objects are kind of broken right now and hard to make full use of. In addition to the notes above, there are some cases where you can't even assign new values into the base class because it gets stuck in some sort of re-initializing loop and won't let you select a new value for the instanced objects. This severely limits the use of instanced objects, which are amazing tools for modular logic when they work correctly.
1.Download, Unzip, Generate Visual Studio Solution, Compile and run the InstancedUObject project.
2. Observe the two blocks in the level, the first one is the InstancedParent actor, the second one is the InstancedParent_Child actor which is a direct subclass of the first one (both BP copies of a c++ class added for the demo).
3.Observe that the child and parent versions have different text above them which is auto generated, the child has an array count of 1 but an empty element while the parent has an array count of 1 but the element contains a UObject.
4.Change the array or singular value (Instanced Children) in the properties editor of the Instanced Parent Actor (the actual class, not the placed version).
Expected: Changing the base class array or single instanced property should change all placed instances and all child classes as well unless they specifically override the uproperty default.
Result: Array element changes don't propagate to child classes, or even placed instances of the same class properly. Initial placements into the level will have the correct values but changing the base class again will not correctly propagate to children and instances. This makes instanced objects nearly useless outside of being edited one by one in each copy or placement of a class and not edited again (unless manually).
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-89974 in the post.