Easy to duplicate -- select an object with multiple materials and use polygon reduction (with recommended settings) and checkmark "Bake Textures" (I used 2048 but I think it happens at all resolutions). The textures are indeed baked to a new material (with "Merge" as the suffix) but the rest of the materials are still there (yipes!). They aren't used, however, but there is no way I know to delete them (at least inside the program -- I thought about bringing it into iClone and running a Python script but that seems fairly needless).