Disney won't share their assets so the team has to recreate them from scratch, but even if they did, they're not meant for use in games and would need to be altered.
Yeah I know Disney hasn’t done it in the past. Pixar shared a small amount of stuff with them for KH3 like the Sully model, but it wasn’t the full thing and did have to be altered a lot as you said. However, when it comes to scenery, textures, etc., it may not be as much of an issue with UE5 as it is capable of using film quality assets that UE4 wasn’t able to thanks to the new Nanite tech. There would still be modifications needed to suit the game’s purposes, but it would still save time I think. (This is more about scenery, textures, etc. as I don’t think real time rendering of Disney’s character models is there yet.)
My hope is that Disney’s mindset may have changed considering the success of 3 and how they’ve been encouraging developers to use their IPs more. Being more cooperative would help Square develop the games faster and thus make them all more money. If it’s going to look near indistinguishable from the movies anyways at this point, why make the developers do extra work when they own the content either way? It could help Square if they are to ever actually make that Disney+ show too. I could see that being pushed back to switch to UE5 too actiallly.
Disney has been working with Epic and Unreal Engine themselves on projects like the Mandalorian recently. So the working relationship between the three companies is there at least.
All that said, there could be more legal hurdles, etc. if they were to share assets with Square, so it may not only be a simple matter of them being protective of their work. But I’m not sure.