Honestly someone could clone VAM into UE5 and have a far superior product. I would venture that it would even release before VaM2 ever does so it would render VaM2 obsolete on arrival.
You are correct, but this is a lot harder than you'd think.
Games like VAM are going down an unpaved road, you have to implement a lot of key features from scratch with minimal guidance, and unreal has a lot of issues. Prototyping in unreal with blueprints is fantastic, but you don't want to actually use that in a final game or you get a slow piece of garbage (something that'd make even the original VAM look fast, this is why a lot of unreal indie games and even bigger unreal games have garbage performance, overuse of blueprints, there's a technique to it, where you re-implement things that may be causing slowdowns in c++ and then access the c++ functions through blueprints, that's how you get the best of both worlds, but modern programmers are allergic to optimization so... go figure.)
Just implementing softbody (realistic jiggle simulation) in unreal is an absolute nightmare, but there are a dozen different established ways to do it in unity, this might even be the main reason the vam devs are using unity, me and a couple others have been trying to create good soft body for humanoids in unreal a while back, and we found a lot of partial solutions but nothing truly satisfying. There is exactly 1 game made in unreal i know of that had impressive looking softbody sim (better than vam even).
Also unreal's rendering engine is a total mess and lumen sucks ass, there is still no proper solution for unreal's infamous ghosting that doesn't sacrifice important graphical features for instance. Also the colors, you cannot get unreal to render colors accurately, or at least doing so requires esoteric knowledge, you can look on the epic forums you'll find a bunch of posts asking how to fix unreal rendering colors way off base, but you will not find answers to those questions. It seems like very few people know how to work the rendering engine and the few who do know aren't sharing the knowledge. All these unreal games that are being released they have this problem, the devs making those games just accepted it, just let it be fucked, settled for 'good enough', probably fucked with the material properties to make things look more correct and things of that nature.
It's all doable, truly, and a really exceptional dev, or a team of good ones could do it too (naughty sandbox dev comes to mind), but a product like this is
extremely complicated to create. The vam devs may not be very competent, as shown by how dogshit vam's performance and memory optimization is in general, and how long they have taken to make vam2. But they do keep going, keep working, keep progressing, and that's the most important part for a project like this.
The engine isn't really the problem, unity is a pretty decent engine when it comes down to it, i do agree that unreal is better after working with both but... Just moving a game to a different engine won't really matter, it's the devs, not the engine, that make the game. It's the competence of the devs that determines how good everything is, not the engine. And if the engine has a problem, it's up to the devs to fix or work around it in the end too.
Also I laughed when someone was comparing godot to unreal, godot isn't even in the same ballpark as unity and unreal. An advanced 3d game like this would be borderline impossible to make in godot.