-how far behind is the UE5 version compared to the Ue4 "original" version
Depends on what you mean by the question. If you mean total content, then they're roughly the same at this point but with very little overlap because the developers apparently haven't done much work on the portion of the map where the UE4 content was placed. UE5 also has a much bigger game world, so having roughly the same amount of content as UE4 means that it feels like a lot less because it's spread out more thinly.
If you mean how much of the UE4 content is in UE5, then the answer is that basically none of it is. A few animations have been repurposed, as have a lot of the overall ideas and themes. But very little in the way of specific content exists in both.
-is the switch justified?
Again, not a straightforward answer here. It really depends on what you're looking for in the project because UE5 wound up being so different from the old UE4 versions. While a lot of the overarching concepts and themes and setting details got reused, UE5 is mechanically very different. Different combat, different items, different UI and quest handling, etc.
Even the underlying design is different - UE4 was designed as a sort of open-ended test project where you just ran up to people and things and did whatever, after which they added some quests that dragged you by the nose around the map. UE5 was designed with the quests that drag you by the nose first, and they tried to make it feel more like a game overall. Also they started with an introductory quest that is definitely game-ey but gets super frustrating because it didn't take the players in mind and just tosses setting info at you for a while until you beat a boss and then get tossed into the main open world area. It definitely makes it frustrating to replay, which is why so many people are begging for a completed save rather than trying to start from scratch again.