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Hi,
This can be the result of many things.
First you should check if the Set Custom Depth-Stencil Pass is set to Enabled with Stencil at Edit / Project Settings / Engine / Rendering / Postprocessing. As it is described here: https://aximmetry.com/learn/virtual-production-workflow/preparation-of-the-production-environment-phase-i/obtaining-graphics-and-virtual-assets/creating-content/creating-content-for-aximmetry-de/ue5-how-to-install-and-work-with-the-unreal-engine-based-de-edition/#converting-unreal-5-project-into-aximmetry-unreal-5-project
If it is still not working, does turning off Lit in the Billboard help?
Warmest regards,