Virtual Textures - much confusion

In my Material graph I have a Texture Sampler node pointing to a parameter texture atlas for a Flipbook.

The Sampler Type is defined as ‘Virtual Linear Color’

My first question and issue is

1 ) In my Material Instance in the Select Drop down for this texture sheet I cannot see or select the textures I’ve created and put in my Content folder. Is this because they are not ‘Virtual’ and if so, how do you convert a normal texture to a ‘Virtual texture’? I notice that one of my textures has a small VT in the lower right of the icon.

  1. In my Project Settings ‘Enable virtual texture support’ and Enable virtual texture lightmaps’ are both unselected. So why am I able to define my Sampler Type to Virtual in my master material graph?

Any feedback appreciated!