This is likely "by design", but the licensee is requesting a warning in base materials for disconnected logic that does not work, which they are reporting as a nuisance during development.
Licensee repro can be found here - https://github.com/lobneroO/UeMaterialError
However it is a very simple repro, create any material with functionality that does not compile.
Disconnect the final node of that sequence, or connect it to a disabled node, from the material attributes -> no errors reported + save
Create a material instance of that material -> error is reported.
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-121073 in the post.