It seems the change didnt make it through to my 4.8 branch, but in the function ShouldCache of the FFlexFluidSurfaceVertexFactory in Engine/Source/Runtime/Engine/Private/PhysicsEngine/FlexFluidSurfaceComponent.cpp you need to change “return true;” to
return Material->GetTessellationMode() == EMaterialTessellationMode::MTM_NoTessellation;