USD/MaterialX referenced materials are not working

Hi, I have a usd asset with some material variants, the material in each variant is referenced from a master material and each variant has a colour override (red, green, blue), when I try to switch between variants in Unreal it doesn’t work as expected, it shows the default material which is grey.

Do you know if this is a known limitation? I have attached a simple repro scene in case it helps it contains a usd files and houdini indie hip with the asset creation template.

I’m using Unreal 5.3.
unreal_ref_mats_001
houdini_ref_mats_001

Thanks!
unreal_ref_mats.zip (37.5 KB)

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