A temporary work-around is to move the Shader outside of the mdl scope to the top-level of the material, which allows the material to distill properly within Unreal. This is however time intensive, as it must be done for every material in the USD.
We’ve fixed the issue locally. I don’t have an exact date for the next release where this will be fixed. If you’re handy with patches you should be able apply this to the plugin source and your issue will be fixed.