The last pictures you show also show your problem. You need to set the Black Material’s normal parameter to Sample Type: Normal instead of Sample Type: Color. The Material Instance is not allowed to change this type settings, so with the black sample it automatically will be set to color and with the Normal Texture is automatically set to Normal. This will produce an error in the Shader compile though so you will want to plug in a “neutral” normal texture. This should fix your problems.