In T168064#2367101, @NiiRoZz wrote:

This is because of a wrong setup in the game. If you add a preview model inside PreviewRenderAttributes. Then override of materials will not work anymore. If you don't it should work fine. You can see below the image that the jacket of the game has this setup. This means if you override for this jacket nothing happens.

In T168064#2367067, @NiiRoZz wrote:

Hello,

The statement is here only when you are using a different model in Preview Model inside PreviewRenderAttributes. Is it the case for you?
If you are looking at {D8D9EE7F3966589E}Prefabs/Characters/HeadGear/Hat_Knitted_01/Hat_Knitted_01_red.et prefab you can see it is using material overrides and in inventory it is displaying the model correctly.