Merging actors with two-sided materials produces incorrect results

Merging two actors using a two-sided material produce incorrect results.

Notes:

Tested with "Allow two-sided material" on and off, the same result is produced. The same issue can be seen when generating HLODs.  

Tested in: 4.23.1 CL#9631420, 4.25 CL#11574810

Test Project:

[Link Removed]

1. Download and open the provided test project
2. Open the developer tool "Merge Actors" 
3. Select and merge any of the 3 placed cubes using the merge tool's default settings.

Results: The resulting actor appears to have 'bleeding' from the material of the other actor. 

Expected: Merging actors to produce the correct results for textures and materials.