Alpha Mask Not Working Like Twilight V1

[Fletch]

... I export Alpha Masks all the time with great results...

This part where you stated you are exporting alpha masks confused me.
I understood this to mean that you were rendering using the Mask Render Alpha Pass Render Setting under "Tech Render Settings". Saving this mask as a .png or .jpg, opening it in photoshop and overlaying in order to mask your rendering background with it, as intended.
Now I understand you were talking about rendering vegetation with the png alpha mask already in the image file. This is completely different.

So, while it turns out it may not apply in your case - just to be on the record:
When rendering with the Mask Render Alpha Pass Render Setting in Twilight be sure to turn OFF any post-pro effects including Simple Tonemap (set tonemap to "none") because these will change the look of the alpha mask and result in a poor quality alpha pass render.

[Chris]

There was a small bug with the Blended Clip option. But I wasn't able to repeat exactly what you are describing where Blended Clip will appear to be enabled but renders as if it wasn't.

However, in any case, we are changing the import process so that imported V1 materials will always import with Blended Clip off. For non-imported materials, Blended Clip will default to on. Hopefully this will work better for you moving forward. The fix will be available in our next maintenance release, which hopefully we will be able to get out pretty quickly.