Honestly if this move helps improve development, than this pause will pay for itself many times over and even after release with patch and content cycles.
Its what hampered Destiny 2 for over 2 yrs (or 1? cant remember). when only one dev at a time was allowed to fuck with files and then wait 24 hrs to compile all the shit. Like even to move one rock. Imagine the planning that had to go into even the most basic of patches.
This is close to accurate in regards to engine upgrades (can't speak specifically to Destiny). Even taking a minor version drop can be a big deal. Typically though, we lock the branch or stream, and one guy will do the merge and resolve issues, CI will run on the farm, etc...I've seen it go smooth and not so smooth. I do know major version bumps are usually far more intense, and cant imagine UE4-5 any different.
That said, if they can (have) pulled it off, then its a win for sure. In my experience though, its usually increases scope quite a bit. Depending on what cadence they run their sprints at, you could lose a few to resolving issues, stabilization, refactor, etc.
Don't get me wrong, its cool to see them on UE5, just not sure overall the schedule impact and I would be shocked if it was minimal.
wait 24 hrs to compile all the shit.
Most places have overnight CI that runs and does this which sounds like what your referring to. To compile binaries for respawn (3 types) took us about an hour, but thats because we had broken up monolithic CI jobs into smaller independent tasks. I typically like to have CI that runs and compiles at least one type with each data change to try and smoke out a bad commit. For engine upgrades ( or visual studio, which can be a pita as well ), we usually like to prepare to support the Code team post integration with some custom automated tests and jobs.
Not every game studio has a Build Engineering team, or DevOps, etc. Most studios have someone in QA or on the Dev team that runs this stuff on the farm (or their local machine), which makes them nimble, but costs them in speed and efficiency when it comes to CI. (it has a lot more cons than pros). For those studios, they usually do this manually, i.e. Dev merges code, resolves conflicts (which can be time consuming), submits, and then manually compiles locally. If you aren't leveraging distributed build your compiles can take quite some time. I think a full build for Fortnite took us 7 hours. Full build for Apex took about 2-3 hours. New World took 5-6 hours. Thats everything: client, server, audio render, shaders and textures (cache is faster, fresh render of all assets much longer), etc. UE cook time was a pain point for Fortnite (in 2017. I cannot speak to any improvements or changes made since then).