Hi,
Definitively result with Corona 9 is not consistent. That has sense, because Corona team added recently some changes and fixes related with RailClone, but only to Corona 10.
Using latest build of Corona 10, i got the attached result.
a) With Instancing On, it works fine both using normal mode and Proxy Cache.
b) With instancing off, Decal is not working at all.
Considering that Decal is a special geometry object, and this is converted to a standard mesh in RailClone, it's normal that it doesn't work correctly. Only instancing can preserve the original Decal object.
By the way, 'Use Segment Material' has not effect if instancing is off. In this case, RC object is converted to a mesh, rendering with the material it have applied (if any).
If you cannot use Corona 10, the only way to preserve Decal would be to convert RC object to standalone instances, using RailClone Tools.
I hope that helps.