setting a an object material to “use layer material” first then editing that material in the layer panel and trying to later switch material directly in the properties material panel is ignored one has to use a different material first to get it to unlock from the use layer material. it though looks at first as it works but if you click in the viewport and then on the object it is still assigned to layer material
i am not sure when that happened i am sure though that this worked before.
one hint is that this material had a duplicate, did not try if that is the same issue with only one.