Based on its self-aware reveal trailer during Microsoft's E3 2021 press conference, there's still a long way to go until The Outer Worlds 2 is ready for launch. There have been reports that when the game does launch, it will run using Unreal Engine 5.
This look into the potential engine switch from UE4 to 5 comes in the form of a job listing on Obsidian Entertainment's official website, presumably for The Outer Worlds 2, that's looking for a Houdini Technical Artist. The listing asks applicants to have experience in the Houdini engine as well as a solid understanding of both Unreal Engine 4 and 5. Additionally, one of the responsibilities listed for the job requires applicants to be able to "test and debug world-building issues in Houdini and Unreal Engine 4/5."
It seems as if Unreal Engine 5 is the current direction for the future of Obsidian Entertainment, as later in the listing it says that the correct applicant should have, "an understanding of new features coming in UE5." Although there are a handful of games that Obsidian is currently working on that might fit the Unreal 5 bill, all signs point to this listing being for The Outer Worlds 2.
As it currently stands, Obsidian is working on three projects: Grounded, Avowed, and The Outer Worlds 2. As Grounded is currently playable in early access and not running on Unreal Engine 5, it can be ruled out as the game the listing is referring to. While little is known about both Avowed and The Outer Worlds 2, it's likely that Avowed isn't using UE5. Avowed has reportedly been in development longer than The Outer Worlds 2 and would be well into its development before Unreal 5 was available.
Because of how early The Outer Worlds 2's teaser trailer made its production seem, it's likely that there's still plenty of groundwork to be done, so a switch to Unreal Engine 5 would be feasible. It also seems like the studio might be trying different things out with different engines including the Houdini engine and Unreal 4 and 5 based solely on the listing.
It's also possible that Obsidian is working on something completely new in addition to its three other titles that might use Unreal Engine 5. There's no way to confirm or deny this unless the studio makes an official announcement. It would be possible if resources were to be thoughtfully split, but there's nothing outside this job listing to indicate that that's the case. There have been rumors that the studio is potentially going to work on a follow-up to Fallout: New Vegas now that the studio's parent company, Microsoft, owns Bethesda, but there's no current public information to really suggest that's in the works.
The Outer Worlds 2 is in development for PC and Xbox Series X.
Source: Obsidian Entertainment