That's correct. Use Segment Material is available only when instancing engine is enabled.
But unfortunately it's not possible to change it dinamically. There are completely separated processes for instancing on/off.
When disabled, RailClone just generates a mesh which is processed by Max (as any standard object). Instead, instancing requires to send the segments directly to the render engine (and each renderer may use a different API).
It's not possible to use Segment Material without instancing, because Max doesn't support multiple materials by mesh (a legacy limitation, inherited from the Scanline renderer).
"Force Instance" is not exactly as Bend/Slice off. For example, segments are sliced for Bevels, even if Slice is off.
Instead, Force Instance should keep segments untouched in all cases (if you find some case which is not, please tell us).