The MaterialParameterCollection is just a way of setting a global parameter such as the player location to all materials that want to make use of it. The foliage material would have a WorldPositionOffset input that checks if the foliage mesh is inside some sphere of influence centered on the player, and if so bends the foliage out of the way. It’s a global parameter problem because an individual piece of foliage being rendered by the GPU doesn’t know anything about the player. Note that this method of bending foliage doesn’t really have anything to do with “collision”, it’s just some math calculated for every vertex of every piece of foliage, based on the player position parameter being sent to the shader.
I’m not sure where the example material mentioned in that document is, or if it’s available to UE4 subscribers yet, but I’ll find out and post back here.