There has been a lot of optimization to nanite (and lumen) in UE 5.1 to 5.5 and they continue to optimize further. But of course we are in diminishing returns territory unless they have an eureka moment. Skeletal meshes becoming nanite might help since "nanite culls nanite" which means that skeletal meshes will be able to cull environment more aggressively and in turn the skeletal meshes themself will be culled more aggressively by the environment as well as well. But if this is a net win only time will tell.
But honestly my take on UE5 is that the engine has a lot of overhead because it's a general purpose engine. Epic has a lot of toggles in place to disable some of these features but the more toggles you add the harder the code will be to maintain so it's a balancing act for Epic. I bet there is some low hanging fruit in there (for instance the G-buffer of UE was pretty fat the last time I looked at it. But that might have changed now I haven't looked at it recently). The small teams that use UE just don't have the man-power, experience or time to dive deep into the engine code and identify the features that add to this overhead that they themself don't need. Also because the engine has to many features and use cases it's harder to modify as more system might depend on each other.
But the problem is not only UE, Unity has the same problems. Remember City Skylines. The dev's used a middle-ware for the characters. That middleware produced very high-poly characters, including teeth (who needs teeth in a top-down city building game). It's a simple thing but the team missed that (and they missed more other stuff too) and shipped. The point is, smaller teams without custom engines have less in house tools and use middleware (and of course the engine itself can also be seen as middleware) that they don't understand fully. All middleware is general purpose and will add overhead. You need to fully understand it and have time to optimize that. But most smaller teams without a custom engine will have less engineers while teams that have a custom engine also have in-house engineers who understand the tech and can educate their artists. Another thing that does not help is all the lay-offs, teams form and fall apart and each time they need to start from almost scratch. There is an upside to all this, thanks to these easy to use engines there are more devs making games than ever so you now have a choice. If a game runs bad just don't buy it as there are now more games coming out than you have time to play anyway.
