still see this issue on static meshes in 4.23 (also 4.25) (skeletal and BSP returns right material).
in 4.23 (also 4.25) i have found that if you ONLY assign physmat in material settings - only then it works
if you assign in staticmesh or staticmesh component, in BP or level instance - you always see default phys mat.
but the most strange thing that is another project based on 4.23 (also 4.25) where everythings works fine.
so, can it be any config setting? editor setting? engine setting? (or something simillar)