This might have already been resolved in v3 but thought it was worth sharing just incase.
Unfortunately we cant upgrade to v3 mid project.
Anyway when i have a material id modifier selected in the modifier stack during IR i get strange faceting, if i select the edit mesh underneath it effectively disabling the mat id change, it stops showing facets. but it cant be a material difference as its one material with a multimat in the diffuse.
This doesnt happen with edit polys