The collision for these buildings remain at sea level, while their visuals jump up to the elevation from the height layer.
These two pictures are from the same view, on the right you can see the collisions and how they are at sea level, while on the left the buildings are visually placed on the default height layer.
Tried a few things like changing orders heightmap and 3d scene layers are placed on the map with delays inbetween but it did not help.
When looking at the OSM 3D Building within the ArcGIS Online viewer I think it does not have this issue, because the clicking on buildings to get more info works no matter if the viewer has a height layer or not. Presumably this clicking would be a trace from the camera which would need to act on some collision which then is in the right position. But I'm getting a bit speculative here.
Versions: Unreal Engine 5.3.2 with ArcGIS SDK 1.5.0
This issue was found in a global scene with wkid 4326 and the default height layer map
Thanks @Potatonat0r for reaching out and posting this issue! Our team is currently investigating it and has found it to be somewhat complex, so resolving it may require a bit of more time. We will promptly inform you once a solution is identified. Thanks for your patience!