Interactivity is very important for real-time VFX! It's made with UE4 Niagara. I didn't use Chaos, Physics system on UE4. All of destructible props are made with Niagara.
It is Customized Fluid VAT (Vertex Animation Texture). FX assets for this are made with Houdini.
with UE4 Niagara. It is Customized Fluid VAT.
Session Video=
https://www.youtube.com/watch?v=bkZkW-Hblig
Session Video (Japanese)
About 1 hour.