It isn’t just a PS5 issue neither solely Act III. I’m on a Mac and I’ve had issues with Act 1. Though wonder if some of this may be because of order of quests:

Act -1 non crèche and non underdark: no issues
Act - 1 crèche: some combat lag (hits and spell effects delayed)
Act- 1 underdark: area semi-active and numerous bugs - getting unplayable.
Act - 1 initial area return: If you should return to initial areas all monsters resurrected but without interactions.