[SM5] Material.usf Error when Previewing Material Function Output

A user on the AnswerHub found an SM5 material error within his material function after following the tutorial below.

[Link Removed]

I followed the tutorial until I reached the point in which the error message appeared.

Regression
Yes, this is a regression. The same Material Function does not produce the error message in binary 4.11.2 - 2946394.

1. Open any new or existing 4.12.5 project
2. Create a new Material Function.
3. Copy and Paste the contents of the attached text file into the material function editor graph.
4. Connect the 'Blended Material' to the Output Result input.

Outcome A [SM5] Material.usf error message appears in the Stats window.

Expected No error message.

Error X3004 Issue

Error X3004 Issue