Yes so the idea would be to try and get nanite to render the least amount of passes as possible.
4 unique objects with 4, 4k materials rendered with 4 nanite material instances could instead be 4 unique objects with 1, 8k virtual texture(s) material rendered with 1 nanite material instance. (while using the same total texture memory)
The Udim workflow described in the docs makes it seem like you wouldn’t even have to manually merge them into an 8k texture, you just tell the system to treat all the textures as one big udim virtual texture. I need to try it out. Seems super cool.
I still need to do some performance tests to see how nanite scales with many material instances to find out if its worth it or not. Also if anyone knows the best way to just compare the old texture streaming performance to VTS that would be helpful.