@Calinou Ah yes forgot about that. Unfortunately I don't think the shader preprocessor is ran for materials as they call RS::shader_create_from_code directly, which does not run the preprocessor as apposed to calling Shader::set_code which does and then calls RS::shader_create_from_code internally.

The way I am thinking of working around this would be:

• Move code responsible for generating the shader to it's own function that can be called when converting to shader material / sending to RenderingServer.
• Calling preprocessor manually in material.cpp before sending to RenderingServer.

Unsure if this is the best solution though.

Alright so I've added a method to BaseMaterial3D which generates the shader code including the preprocessor directives so that when you press "Convert to ShaderMaterial" in the editor, instead of dumping the already processed shader code from RenderingServer, it generates new shader code with the directives still in it. The method is just code which used to be inside BaseMaterial3D::_update_shader, but with the updated fix for refraction. The shader code is also now preprocessed inside BaseMaterial3D::_update_shader.

I didn't add this to any of the other material types, but I can if it makes sense. If I need to then I could just make another pr which adds this method to all of the materials and remove it from this one.

EDIT: Went with clayjohn's solution of using OUTPUT_IS_SRGB instead to determine if Compatibility is being used.

Thanks!