Well, I do think a certain narrative has formed around this idea that XSX is "basically" just a supercharged PC in a console box and the PS5 is some exotic system design, because the conversation has shifted to I/O improvements and innovations, something Sony leveraged with their Road to PS5 presentation partly out of starvation from fans in wanting ANY new info on PS5 (and FWIW, most of those fans were looking towards the TF number up until that presentation).
However, I do wonder to what extent Microsoft fed into that because since they sensed most gamers were hopped up on TF and nothing else (even when some of us kept trying to tell them there was more to the systems than just TFs months ahead of Road to PS5), that was what they pushed ahead in their earlier messaging. They actually did provide some info on other aspects of the system design outside of the GPU power, but most of it has either been buried under TF power talk due to the timing they released that info, or has since been scattered about in delivery by some team members here and there in a random Twitter post, or this random stream on a channel most gamers aren't paying attention to, or this doc dump most gamers, again, aren't going to be bothered to read, etc.
That narrative I'm referring to kind of piggybacks off the "brute force vs. optimized elegance" meme that formed a while back too, which is also disingenuous because when you look a little more into the system designs you see that both of them have a lot of unique optimizations to them while also having some brute power advantage over the other in some select areas. But again, I think for some people it's just way easier to boil everything down to simple terms if it makes conversation easier.
The onus is on MS to shift back against that narrative, but they also need to do it in a way that plays to their strengths. And preferably, that needs to be shown in the July event. They have to demonstrate the impact their I/O solution in tandem with their hardware advantages brings to next-gen game design on their platform. Simply discussing it at an architecture presentation, while very much valued, won't be enough (though it can help elucidate on anything that's already been shown beforehand).
I think it's a bit beyond Epic just trying to leverage it; as you've said, they rewrote parts of their I/O sub systems with PS5 in mind, and I'd imagine Sony helped them a lot in that since they have been partners working on this for years. Just the same how I'm sure MS has been working with Epic on providing support for engine features in UE5 that will leverage their platform's hardware features.
Unreal seems to be the most popular game engine around though when it comes to use in commercial console games, so while the potential for other engines to offer similar levels of abstraction and feature access that's easy enough for devs to use is up in the air, those engines'll either have to eventually try to compete on that front or risk having devs switch over to a competitor engine that provides what they want.