As I expected, you got confused with the new system. Since 4.14, you have all the materials for your object listed above in the “Materials” tab. There are material slots and slot names. For your object, you only have 1 material in slot 0. If you want to have a different material for LOD1, click on the “+” sign next to the text “material slots”. This will create a second material slot. Set your LOD material there and give it a name. Then, in the LOD1 tab, you can choose the material slot which the LOD is going to use from the drop down. Just select slot [1] there and you setthe material of LOD1 as you wanted.
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