I thought the problem here was NOT that there were problems with the engine that, per the licensing agreement, may not work with their systems, may not work as SK expects, and that there may be bugs that never get fixed...I thought it was that there were two different versions of the engine: The one SK got was significantly broken compared to the one Epic was using for their own games.
If this is the issue, SK still has a case and what Epic just spouted off has nothing to do with the original claims. The licensing agreement doesn't enter into it. It WAS fixed, it WAS doing what SK wanted it to do, there WERE no bugs that would have hindered their game design. Their arguement is that they paid for what Epic was using, not the neutered version they got.