This is a 100% reproducible bug in Houdini Engine for UE4. The Houdini Engine does not preserve manual LOD screen sizes in Unreal. Steps to reproduce:
1) Create an instance scatter-er (copy to point > Pack and Instance ) with an Operator path exposed.
2) In UE4 drop a static mesh with built in LODs (let's say 4 of them). See tutorial for generating these.
3) Double click the static mesh in UE4 and under details un-check “Auto Compute LOD Distances”. Manually set them yourself (Screen Size 0.0- 1.0).
3) place the HDA in the level and drag the static mesh with custom LODs into Geometry input.
4) Select “Export all LODs” just above the geometry input. It's the only way Houdini Engine will generate Hierarchical Static Instanced Meshes VS Static Instanced Meshes.
5) You'll see the instances appear to flicker, this is because Houdini Engine has turned on the “Auto Compute LOD Distances” flag again. (See step 3)
6) The only solution is to bake to a blueprint and drag your original static mesh (with manual LODs) into the blueprint replacing the new source mesh that the HouDini engine generated.
Sorry if this has already been filed with SideFx.
Cheers!