Hi, some thoughts in no particular order. For context, I've completed (pending results) an OU Computing degree while working a full-time-ish but flexible software job. So somewhat comparable to your own situation. I'm broadly happy with how it all went and would recommend it to most people who might consider it.
I don't know much about the Engineering modules, except that I did take one of them (TM355, communications/signals) and it ended up being one of my favourites.
FYI the OU engineering course leads to a general BEng degree, not to specialist degree titles. You can choose the "mechanical engineering route" and study mecheng modules, but your degree cert will still say "Bachelor of Engineering", not specifically BEng Mechanical Engineering. I'm not sure if this is an important distinction for engineers/your employer or not.
Do you have more info about the day-release option(s)? Which uni, how long would it take to complete the degree, etc?
Be careful about the "or scattered equivalent hours" thing- occasionally leaving a couple hours early isn't the same as having full days to dedicate to study.