Unreal Engine 5

It would also look orders of magnitude better. It's certainly possible but I just don't see any evidence for it. They also didn't try to get it running on lower end hardware and I've seen UE4 games running on Switch without light bakes. Do you know for sure or are you just assuming?
Not 100%, I think people like LemonHaze who are devs and did extensive modding for Shenmue 3, would tell you for certain, but AFAIK dynamic lighting on a stationary light source doesn't make any sense, it runs worse with no GI, so there would be no benefit to using it in interiors and such.

The benefit of dynamic lighting is, well, that it's dynamic. Why make it stationary and put it in a static scene, when you can bake and save performance? That's why I'm pretty sure most lights in the game are baked.
 
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