Install the content examples project in UE4 4.7.0 P7 and open e.g. Destructibles scene. Hit play and walk up to a trigger. The material won’t change, though the destruction behaviour will trigger.
I’ve got a number of dynamic material instances in a game that worked perfectly in older previews and 4.6 but now don’t accept parameter changes.
Sorry if this has been fixed or reported; I’ve been searching for anyone else mentioning it, but came up with nothing.