Hi -
After review by our developers this issue is working as designed. The particular problem that many are facing is that the material that you are assigning to the spawned Skeletal Mesh does not have the Usage set correctly. Since the material is not assigned until Runtime, you will need to go into the material and manually click on the “Used with Skeletal Mesh” option and re save your material. The material should then render as expected at runtime.
Thank You -
Eric Ketchum