Repro steps:
1) Open the project and three-trees-with-different-scales.scene
2) In the Game view notice, that the billboards are the same size
3) Lower the Field View of Camera and notice that when LOD increases, the scale changes

Expected: Billboards are created corresponding to the Scale of the object
Actual: It is ignored and all the billboards are the same size
Look at screenshots for Expected(5.3) and Actual(5.4)

Reproduced in: 5.4.0b11
No repro in: 5.3.4p1; 5.3.1p1