Its does not happen with standard mesh but in this case I am forced to use VrayProxy.
All DR nodes use the same versions of Windows, Max, V-Ray, RC etc.
It happens with standard V-Ray. Not RT.
But running "Railclone Tools" via Utilities tab on the RC object worked fine and everything now renders correctly.
Also I have another unrelated question.
I made some styles and added them to the RC library. Some of them, when merged to a new scene have an XREF material applied.. is there a way to avoid this?