When you edit the parameters of a material function that is within a material layer from the material instance, the material instance does not update.
Found in 4.20 CL# 4369336, 4.21 CL# 4541578, and 4.22 CL# 4573698
The thumbnail will update with the changes however the material preview will stay red. This is the case even when applied to a mesh.
The material would update with the changes made to the parameter.
You can get this to work by changing the parameter in the Material Function to a Vector3 input, then using a vector parameter in the material layer. (See attached images)
There's no existing public thread on this issue, so head over toAnswerHub just mention UE-66800 in the post.