The thing about AW2 is, while the lighting tech itself is clearly next gen and the VFX is clearly next gen, including the cloth tech. The game as a whole does not have the visual fidelity of a next gen game.
If we are to believe everything we are told about the tech (mesh shader, baby path tracing, control's destruction).
Then the fault lies squarely on the environment and lighting artists.
You call the PS5 UE5 demo a corridor. But this game is as corridor as they get. All remedy games are corridors.
Quatum Break was a corridor. Control was a corridor (litterally took place in rooms of a house).
AW2 is also a corridor.
Infact the launch gameplay they showed in the Xbox showcase was in a house, lit by one light source.
There weren't anything there that looked impressive or even scary. Then they walk outside and again pitch black and a bright VFX source. This is that's the problem with Remedy.
They think next gen = visual effects. It isn't.
Compare that with say this. This was AI generated. Notice the interesting lighting and the mood the lighting casted.
Now imagine the player character slow walking on this street and then going next to that car and then investigating behind that house and entering it. Notice the level of asset density
The entire scene would be scary, just from the realism of it, especially with added music.
But no....they rather molest the screen with stupid VFX and bland environment and lighting.
Literally it looks like the entire game takes place in pitch darkness.
As others said, they should have baked the lighting and saved huge on performance.
So no the problem isn't their individual tech.