Download the licensee repro from here- [Link Removed]
Password is in the UDN comments + comments below
Watch the licensee video posted here for guidance on how the repro works - [Link Removed]
After following these steps the source texture is reduced to a uniformly lit, low resolution texture.
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-175954 in the post.