Warning that Virtual texture streaming is off even though it is enabled on the texture asset?!

Hi,

I am getting a warning that virtual texture streaming is off on a texture asset even though it is enabled? This warning is new to me in 5.6. Has anyone come across this before?

LogTexture: Warning: xxxxxx has UDIM Blocks, but bVirtualTextureStreaming is off; will build just the first block.

Virtual Texture support is enabled in the project settings.
Toggling the texture asset to regular texture and back to virtual had no effect. Re-importing nor fresh importing had any effect in clearing this warning.

Am I missing a new settings toggle somewhere?

Any suggestions as to what may be going on and what to do are welcome.

thank you
Marcel