It turns out the team switched from using Unreal Engine when developing effects for the second season of the show.
The ILM team shared a behind-the-scenes look at their visual effects work on The Mandalorian that was done in all the company's five of ILM's studios (San Francisco, Singapore, Vancouver, London, and Sydney). They also teamed up with other vendors to finish effects.
The team noted that the season's 8 episodes "featured nearly 5,000 visual effects shots in addition to all of ILM's real-time effects work done for use during principal photography." They used a number of techniques when working on the series: miniatures, motion control, traditional puppeteering, advanced animatronics, spectacular special effects, and photo-real CG.
One of the more interesting facts is that they also revealed they moved away from using Unreal Engine when working on season two. ILM developed Helios, the team's own real-time render engine which was used for all StageCraft rendering in the Volume. Unreal was used for development work in the Virtual Art Department, not for final-pixel work and in-camera capture.