My normal processing routine is to perform steps 1 and 2, then run a LAStools script that reduces noise and removes many pointsin flat areas on the densified point cloud. Then I import it back into Pix4D and then generate the mosaic. This drastically speeds up mosaic generation and in some cases makes it possible at all when I have clouds over 1 billion points. In my opinion the resultant mosaic is better too.
With the most recent update (2.1.49 64-bit), Pix4D fails, saying the cloud is empty. I have viewed the cloud in CloudCompare and it looks excellent, with about 175,000 points, down from 55 million in the original. I have also tried saving the cloud as a LAS instead of a LAZ but there is no difference.
As a work-around I am using the full cloud.
Let me know if you need any project data for troubleshooting.