Hello,
I tested with a simple UE 4.26 project with a vive Focus 3.
Don't know if it's a problem with Unreal gine and this version but it seem Blending is done on the color intensity (if an object is white it will be "opaque", if it's 50% grey it will 50% transparent. I don't know if there the right way to pass alpha with UE ?
And VR part / camera view seem not be in the same coordinate, there is a lot of parralax between VR and reallity, object doesn't fit were they should, very strange effect, I will try with UE 5.2