TLDR: Go to Project Settings -> Plugins -> OculusVR -> General Oculus -> Launch Oculus Perforance Window, then do what it says.
So this is pretty simple. OculusVR plugin in Unreal Engine 5 (and 4) comes with a Performance Window (see image below).
This will suggest improvements for your Oculus VR/Quest 2 settings.
Be careful because these are just suggestions and you may want to ignore some. For example, in our image, we have ignored their suggestion of ‘Disable Support for Movable Directional Lights’ & ‘Set Max Movable Spotlights / Pointlights to 0’. The first is because we plan to have movement of the directional Sun light to mimic a calm day/night cycle for SpiritVR. Secondly, 1 moveable light in a scene is always good, especially in VR which we use the Moveable Light to act as the end of the pointer/lazer so users can see what they are interacting with better.
If you read the first line of TLDR, you will want to go to Project Settings -> Plugins -> OculusVR -> General Oculus -> Launch Oculus Perforance Window, then do what it says.
Some suggestions for other improvements:
Set lights to static
Bake lights/lighting for the scenes to general the shadows on the maps
Combine static meshes (do this before baking) -> we like to do this in Blender.