Thank you so much for responding.
Just to make really really sure, I’ll explain my situation further: I’m a freelancer 3D artist and I’ve been asked to make hair for a UE4 character. I did my own modeling, rendered out hair textures from hair clumps I created - everything from the scratch, but decided to create the UE4 material as an instance from a Paragon hair material. I inserted my textures and tweaked some parameters to suit my needs. Now, as far as I know, in order for the material Instance to work, the parent material needs to be present in the file (believe me, I wanted to get rid of it), so the original material remained in the project.
Unfortunately, I’ve been told this was a copyright violation, that the client wouldn’t be able to use this asset due to said copyright and that the information that stated the assets were “free for commercial use, no strings attached”, was old and, I quote: “The latest updates regarding the usage of this material (you have made use of in the delivery) state completely different, and since the buyer has proved the proof that the work wasn’t usable for the purpose it had been made for, due to copyright violations, this order has been canceled.”
This is why I asked here. I still don’t know whether I misunderstood the terms from the start or it has actually changed. Do you think this is a matter I should contact Epic Games in regards to?