Although MaterialInstanceConstant has a physical material mask and physical material mask map property, these properties does not appear in the Material Instance Editor's details panel. ...
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Nanite mesh socketed to a Skeletal Mesh is not affected by the 'Owner No See' or 'Only Owner See'. Compared this against a regular Static Mesh. ...
The result is that nothing states why the path returns blocked or pathfinding stops. There should be a log of at least a warning about the improper capsule setup. ...