We currently don't support the Object Scale node when instancing but it's only because that node gets the data straight out of the primitive uniform buffer. We could extract scale information from the instance transform. We have a similar request to make ObjectRadius work in UE-29023. That task could also make the Object Scale work.
Using Object Scale in your material with an Instanced Static Mesh does not change the color of the material if you scale the individual instances of the Instanced Static Mesh component.
If you scale the entire component, the instances update as expected.
Found in 4.12 Preview 4. Reproduced in 4.11.2 binary and Main CL 2980114.
1. Open the editor
2. Create a new material
3. Add an Object Scale node to the material
4. Plug the XYZ output into the Base Color
5. Save the material
6. Create a new actor blueprint
7. Add an Instanced Static Mesh Component
8. In the details panel, add an instance
9. Give it your new material
10. Scale the Instanced Static Mesh Component down to .5, 1, 1 (notice the color change)
11. Reset the scale of the component
12. Go into the instance transform in the details panel
13. Scale it down to .5, 1, 1
Result: Scaling the individual instances of an Instanced Static Mesh does not seem to function with Object Scale, but scaling the entire component works properly.
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