Is this fetaure supported in this release? I’m assigning materialID between 1-3 via magma. I’ve tried both the standard multi/subobj material as well as the Vraymultisubtex and neither produce the expected results. THe viewport shows different colors as expected.
I may not be doing this right–I want each frost per particle to have a different look. I’m assigned the mtlIndex via magma and has material set to ID from MtlIndex Channel in Frost.
Unfortunately, it does not work yet. We just grab the selected objects and instance them without changing any of their properties (material, animation frame). The material (if any) assigned to the source geometry object will be used by V-Ray, not the material assigned to Frost or controlled by Magma etc.
A workaround would be to create several instances of the same object with different materials assigned to them, and use the ShapeIndex channel to vary them instead of the MtlIndex to control the material. In my very first example with the text over grass, I used Magma to read the MtlIndex channel of the text faces and picked different shapes using ShapeIndex based on that. (I had to do this because in the very first build, having a Material actually crashed Max hard! 
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It is on our ToDo list together with Animation Offset which poses a similar problem - we need to ensure that a specific mesh with a specific material at a specific time is considered a specific unique object that will be cached by V-Ray just once, and then replicated millions of times without wasting extra memory.
Thanks, glad its a known issue.