Problem description: How can I find where we store material palette files?
Below is a workflow that will allow you to find the location of material palette files.
The configuration variable MS_MATERIAL stores the .dgnlib folder of Material palettes used in the Family/Part Editor by selecting "Render palette" from the Parts View drop-down list.
The above image shows the list of locations where Material dgnlibs are stored.
For example, Bentley_Materials.dgnlib is stored under C:\ProgramData\Bentley\connectsharedcontent\materials.