5.6.1 version breaking material setups?

Hello,

I have made my own material masters and ready material instances which I use extensively. Now after updating to UE5.6.1 everything is just broken.

Previously I just copied the material folder to new project and everything worked perfectly. Now the Master Materials and Material Instances are pretty much reset to zero. Specifically the Material Functions are not recognized for some reason, and MM’s textures are missing (in material graph). This poses a significant problem due to sheer number of the MI’s.

Textures for MM’s are also default UE Diffuse textures. The MF’s are fine and still exposed to library.
Due to MF’s not being recognized the “strands” are broken and nothing down the line works.

Is there any way to fix it globally?