1. Inherit from an existing ArmaReforger material. Keep the parent name instead of entering a new one.
The child material now looks as it should:

TerrainMaterial : "{070D2A8F3D79109A}Terrains/Common/Surfaces/Cobblestone_01_Wave.emat" {
}

2. Make any edit to the child material and save it.
In editor, it will appear to work fine until the Workbench is restarted, but when opening the file saved on disk, you can already notice the problem:

TerrainMaterial {
 SatMapBlend 0
}

3. Restart the editor so the material will be properly reloaded from disk.
The inheritance has disappeared and the material is instead an emtpy base material class with the only set parameter being the change you made.

• This only happens when you don't choose a new name.
• The broken material file looks a bit similar to how an override would look, but it doesn't work as one.
• If this cannot be inherently fixed (which I doubt), it should at least be prohibited to keep the parents name.