We have been having this problem for a while but now I finally took time to document, prepare sample files and do some more testing. This is a bit obscure but annoying display issue with nested blocks that use transparency map and custom per-object display mode.
Setup: Main display mode is Rendered (modified to show edges of surfaces and meshes), it could also be shaded or any regular non-wireframe mode.
The mode assigned to objects with transparency map per-object is a copy of Rendered, but with no edges (common for entourage display with Alpha map like trees, people etc.).
All works fine for regular objects or non-nested block objects. As soon as the blocks become nested, the transparency display goes out of whack. The condition for this problem to occur is that the original blocks or the non-block geometry has to be not visible, otherwise it works fine.
Note how the “evergreen” block made of 2 simple planes with transparency pretty much disappears if nested, because if this problem.
Here is a sample of how it looks:
Here is a test file shown in the video (textures saved in the file)
nestedblocktransparency_sample.3dm (2.6 MB)
@jeff - tagging you here as the main Display dev but it may as well be someone else that needs to look at it. Oh, I and tested both in latest V6 and WIP - same problem shows.