Hierarchical Level of Detail is Unreal's system for replacing clusters of distant actors with a single simplified proxy mesh. It is what lets a World Partition world render a city on the horizon without paying for every building in it.
For source control purposes the important property is that HLOD output is derived data. It is generated from the actors it summarizes, so you can always rebuild it. That makes versioning it a real decision rather than an obvious yes.
Committing it means every machine and every build agent produces identical results, and people who should never have to run a build step never do. The cost is a set of large binaries that churn in history whenever the source actors move.
Excluding it keeps history lean and suits teams whose artists regenerate constantly. The cost is rebuild time on every fresh workspace, and the risk that two machines disagree about what the distance silhouette looks like.
Either choice works. What causes real problems is a half-committed HLOD directory, where some proxies are versioned and others are not, producing diffs nobody can explain. Decide once, document it in onboarding, and configure the exclusion list to match.