is the asset gonna have Level of Detail meshes? then yes you want those straight. the amount of stretching here is nothing baking/3d texturing can't handle.
The changes they've made to deferred decal materials in ue5 make it a bit trickier to fake this stuff. You can reduce the opacity and it'll reduce the amount of color but at the same time it'll reduce the influence of your normals and roughness you could try controlling the opacity with fresnel which does this sort of…
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