When damage class configured to swap materials ARMA3 engine only acknowleges materials that were applied in the p3d.
If material was swapped using hiddenSelections it is ignored when damage is applied and game swaps original material, causing whole model to look completely different compared to the "healthy" version.
Example video of this behavior:
It can be reprodued with any custom vehicle, not unique to this setup.
It's also relevant to player uniforms too, which don't show damage textures if their materials are changed using hiddenSelectionsMaterials.
Model was spawned using hiddenSelection material (xxx_camo.rvmat) to replace shiny default material (xxx.rvmat) assigned in the p3d.
When damage was applied game ignored xxx_camo.rvmat and swapped xxx.rvmat instead, despite xxx_camo.rvmat entry in the Damage class.