diff --git a/source/main/physics/ActorSpawner.cpp b/source/main/physics/ActorSpawner.cpp
index 9fa6a7c89e..9264e610fa 100644
--- a/source/main/physics/ActorSpawner.cpp
+++ b/source/main/physics/ActorSpawner.cpp
@@ -379,7 +379,7 @@ void ActorSpawner::InitializeRig()
 
     m_flex_factory.CheckAndLoadFlexbodyCache();
 
-    m_placeholder_managedmat = Ogre::MaterialManager::getSingleton().getByName("rigsofrods/managedmaterial-placeholder"); // Built-in
+    m_managedmat_placeholder_template = Ogre::MaterialManager::getSingleton().getByName("rigsofrods/managedmaterial-placeholder"); // Built-in
 
     m_apply_simple_materials = App::diag_simple_materials->getBool();
     if (m_apply_simple_materials)
@@ -1634,6 +1634,7 @@ void ActorSpawner::ProcessProp(RigDef::Prop & def)
 
     prop.pp_scene_node = App::GetGfxScene()->GetSceneManager()->getRootSceneNode()->createChildSceneNode();
     const std::string instance_name = this->ComposeName("PropEntity", prop_index);
+    LOG(fmt::format("[RoR] DBG ActorSpawner::ProcessProp(): creating MeshObject '{}' in RG '{}'", def.mesh_name, resource_group));
     prop.pp_mesh_obj = new MeshObject(def.mesh_name, resource_group, instance_name, prop.pp_scene_node);
 
     prop.pp_mesh_obj->setCastShadows(true); // Orig code {{ prop.pp_mesh_obj->setCastShadows(shadowmode != 0); }}, shadowmode has default value 1 and changes with undocumented directive 'set_shadows'
@@ -2291,7 +2292,7 @@ Ogre::MaterialPtr ActorSpawner::InstantiateManagedMaterial(Ogre::String const &
         return Ogre::MaterialPtr();
     }
 
-    return src_mat->clone(clone_name, true, m_custom_resource_group);
+    return src_mat->clone(clone_name);
 }
 
 void ActorSpawner::ProcessManagedMaterial(RigDef::ManagedMaterial & def)
@@ -2324,12 +2325,17 @@ void ActorSpawner::ProcessManagedMaterial(RigDef::ManagedMaterial & def)
         def.specular_map = "";
     }
 
-    // Create temporary placeholder
+    // Create fallback placeholders
     // This is necessary to load meshes with original material names (= unchanged managed mat names)
     // - if not found, OGRE substitutes them with 'BaseWhite' which breaks subsequent processing.
     if (Ogre::MaterialManager::getSingleton().getByName(def.name, resource_group).isNull())
     {
-        m_placeholder_managedmat->clone(def.name, /*changeGroup=*/true, resource_group);
+        LOG(fmt::format("[RoR] DBG ActorSpawner::ProcessManagedMaterial(): Creating placeholder for material '{}' in group '{}'", def.name, resource_group));
+        m_managedmat_placeholder_template->clone(def.name, /*changeGroup=*/true, resource_group);
+    }
+    else
+    {
+        LOG(fmt::format("[RoR] DBG ActorSpawner::ProcessManagedMaterial(): Placeholder already exists: '{}' in group '{}'", def.name, resource_group));
     }
 
     std::string custom_name = def.name + ACTOR_ID_TOKEN + TOSTRING(m_actor->ar_instance_id);
diff --git a/source/main/physics/ActorSpawner.h b/source/main/physics/ActorSpawner.h
index 897b5aade4..53abbb43e1 100644
--- a/source/main/physics/ActorSpawner.h
+++ b/source/main/physics/ActorSpawner.h
@@ -473,7 +473,7 @@ class ActorSpawner
     RoR::FlexFactory                          m_flex_factory;
     std::map<std::string, CustomMaterial>     m_material_substitutions; //!< Maps original material names (shared) to their actor-specific substitutes; There's 1 substitute per 1 material, regardless of user count.
     std::map<std::string, Ogre::MaterialPtr>  m_managed_materials;
-    Ogre::MaterialPtr                         m_placeholder_managedmat;
+    Ogre::MaterialPtr                         m_managedmat_placeholder_template; //!< An 'error marker' material (bright magenta) to generate managedmaterial placeholders from.
     Ogre::SceneNode*                          m_particles_parent_scenenode;
     Ogre::MaterialPtr                         m_cab_trans_material;
     Ogre::MaterialPtr                         m_simple_material_base;
diff --git a/source/main/resources/CacheSystem.cpp b/source/main/resources/CacheSystem.cpp
index 10c3e887ce..f2af9b09bd 100644
--- a/source/main/resources/CacheSystem.cpp
+++ b/source/main/resources/CacheSystem.cpp
@@ -1209,6 +1209,20 @@ bool CacheSystem::CheckResourceLoaded(Ogre::String & filename, Ogre::String& gro
     return false;
 }
 
+std::string CacheSystem::ComposeResourceGroupName(const CacheEntryPtr& entry)
+{
+    // Compose group name as "{bundle <local path>}", 
+    //  where 'local path' means under 'Documenst\My Games\Rigs of Rods'.
+    // -----------------------------------------------------------------
+    std::string name = entry->resource_bundle_path; // Start from full path
+    size_t prefix_pos = name.find_first_not_of(App::sys_user_dir->getStr());
+    if (prefix_pos != std::string::npos)
+    {
+        name = name.substr(App::sys_user_dir->getStr().length());
+    }
+    return fmt::format("{{bundle {}}}", name);
+}
+
 void CacheSystem::LoadResource(CacheEntryPtr& entry)
 {
     if (!entry)
@@ -1220,7 +1234,7 @@ void CacheSystem::LoadResource(CacheEntryPtr& entry)
         return;
     }
 
-    Ogre::String group = "bundle " + entry->resource_bundle_path; // Compose group name from full path.
+    Ogre::String group = CacheSystem::ComposeResourceGroupName(entry);
     bool readonly = entry->resource_bundle_type == "Zip"; // Make "FileSystem" (directory) bundles writable. Default is read-only.
     bool recursive = false;
 
diff --git a/source/main/resources/CacheSystem.h b/source/main/resources/CacheSystem.h
index d42c981aa9..b60b2375d9 100644
--- a/source/main/resources/CacheSystem.h
+++ b/source/main/resources/CacheSystem.h
@@ -280,6 +280,7 @@ class CacheSystem
 
     static Ogre::String StripUIDfromString(Ogre::String uidstr); 
     static Ogre::String StripSHA1fromString(Ogre::String sha1str);
+    static std::string ComposeResourceGroupName(const CacheEntryPtr& entry);
 
     void ParseZipArchives(Ogre::String group);
     bool ParseKnownFiles(Ogre::String group); // returns true if no known files are found