Found it - can’t mesh paint on a Nanite mesh.
Nanite is currently limited to rigid meshes. These represent greater than 90% of the geometry in any typical scene for projects and is the initial focus of Nanite development. Nanite supports dynamic translation, rotation, and non-uniform scaling of rigid meshes, but does not support general mesh deformation, whether it is dynamic or static. This means any position of a Nanite mesh in a way that is more complex than can be expressed in a single 4x3 matrix multiply applied to the entire mesh.
Deformation not supported includes, but is not limited to:
** Skeletal animation*
** Morph Targets*
** World Position Offset in materials*
** Spline meshes*
Nanite meshes also do not currently support:
** Custom depth or stencil*
** Vertex painting on instances*
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- This specifically means per-instance painted colors using the editor’s Mesh Paint mode.*
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- Vertex colors imported on the original mesh are supported.*