Guys, I think I found a good workaround to this problem thanks to chatGPT 
In short, use Property Matrix for bulk replacing the material with material instance.
Here are the steps in detail (I use UE 5.3.2):
- Right click to your “Material” > Asset Actions > Select Actors Using This Asset (This will select all the actors/objects using this Material)
- Right click to one of your selected objects > Edit Selection in Property Matrix (You may want to select “Edit Components in the Property Matrix” if you used “Import Into Level” feature)
- Select all objects at the “Property Matrix Editor” window and go to “Details” tab. Then click to “Display # Materials” under Materials section (If you have more than one element, click display for all of them).
- From the Content Browser, drag and drop your “Material Instance” to the Material you want to replace at the Property Matrix Editor.
- Click “Save this asset” at top left of Property Matrix Editor (This might take a while depending on your object amount).
That’s it! You can now delete the Material if you want.
I hope this works out for your case as well. Good luck!
