Look at this model:
Each color is a different material. and each rectangle is a different mesh And Each material is a draw call.
If the meshes are separated there 2 yellow materials, three pink materials, one grey material and one green material.
If the meshes are merged there is only one yellow material, one pink, one grey, and one green.
As far as I know, that’s how unreal works.
I don’t use Nanite, it’s a very low-poly model, but it has a ton of materials.