Answer - Because UE5 has no Tessellation feature, CC3Plus looks blocky in UE5.

Now, allowing for export of a subdivided CC3Plus is one way of bypassing the Nanite driven removal of Tessellation in UE5.
But, another more interesting and fun way to update the quality of RL characters going to UE5 would be to have an option for the user to model an HD version of the character in CC4, with all the extra detail elements that don't exist even with a subdivided CC3Plus.  
As a comparison, imagine the extra definition that Daz's subdivision allows characters to have - Not only are characters able to be smooth, but extra detail morphs are able to be applied onto the subdivided character.  So, you get (1) smoothing, and (2) extra detail, all off of an original lower poly base model. 

In use, an HD character would probably cause performance issues in iC8 for several reasons - (1) it would weigh down the engine, slowing down everything else going on in the scene due to higher compute requirement, and (2) it would reduce functionality of real-time Live Link animation streaming because it is too compute intensive.

So, one consideration is to link a user low poly character with a corresponding HD character, such that the low poly model paradigm be maintained in iC8 for animation, with an "export-ability" to export the higher version model as part of an Alembic, FBX, or LiveLink Export.
Imagine running a scene in iC8 with a low/regular-poly character, and then upon export of the animation to UE5, it offered you the option to supplement an HD .iAvatar in place of the low-poly one, as part of the FBX export, such that you can enjoy the animability of iC8, with the HD-ability of UE5.
Or, when you would LiveLink an iC8 scene over to UE5, the transfer file dialogue would allow for you to replace your animated regular-poly character in iC8, with the HD version .iAvatar that you saved in CC4, when the LiveLink plugin sends the data over to UE5.

Of course if iC8 got some major update that allowed for HD characters, that would 'render' the subject moot. 
But in absence of this, to RL, and other users imagining what an HD character experience may look like in iC8, just my 2 centaurs on the subject of HD characters with HD details beyond a basic subdivision.  

YES +1 !

You would always want the option of using lower poly characters, even is an HD version is available.

But the idea to use lower poly stand-ins that can then be replaced is even useful when working within iClone.

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Very true, indeed prior to render in iClone, and prior to export, it is possible to switch a character into place that way the HD one gets rendered/exported out. 
And when we do this we see that the incorporation of the character even at this last final point can really slow down the processing for iClone. 
Specifically for export/LiveLink It would be great to have a dialogue export an HD character out, such that it not slow down the program due to it competing with iClone's real time computation.
But that's interesting to have it speed up rendering as well if it could be done on back end not competing with real time processing.

You know, quite frankly it looks sloppy to have UE5 pumping out this amazing detail and then we have these jagged-edged characters in scene. 
It comes off like you didn't put the effort in to achieving fine detail your scene.  It makes you look incompetent.

Yes , a Game Engine gave us a HD Character called Meta Human, so why not have a CC one?  I did subdivide a CC4 in Maya and it looks so cool , especially the awesome extended blend shapes.
CC4 and IClone have subdivision for their Characters but please let us export these HD Characters !
my 2 cents 😁
BTW , Tony DPrime has eagle eyes , he sees everything ! 🤪

Hi TonyDPrime
1+👍👍👍

Fully agree...
@RL
would be cool if you consider this for a future update...

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You can indeed animate a MH through iClone, so as this is a CC4 thread it would be for characters created via CC4, and for benefit of the CC4 creators who want to see their CC4 characters in good form.
But you are right, we do have the alternative of Meta Human, but we can't really use any RL-content to adjust the design of that character directly like you could while using a CC4 avatar.