Hi kindeyegames,
I'd like to follow up on the progress of fixing this bug, as I've noticed that it keeps causing some strange issues.
Currently it has come up again:
if the 3DObject is set to Static, when loading a material from sprite, some sizes of the sprite canvas (eg: 256x256) will causes the material to render incorrectly.
This can only be solved by disabling the project's "Max spritesheet size". This may be the same bug causing the problem.
Please check the screenshot below, and the new .c3p file.
Demo file: