For performance, efficiency, and game size, we rely heavily on trim sheets and reusable textures.

Instead of texturing a pillar, a doorframe, and a wall baseboard separately, create one texture sheet that contains tiling strips of wood, stone, and metal trim. Artists map their UVs to this single shared material.

Seamless, tileable textures for large surfaces (brick, plaster).

With just these two types of textures, the games would look very repetitive. To avoid this, we use a handful of techniques.

Each vertex holds a color. We have a system that allows applying a texture for each of these color channels (R, G, and B). This means, we can have a base material, and then paint with 3 additional materials on top of it. For example:
Base material is wood, and we can vertex paint damage, stains, and paint onto it.
Vertex colours are authored in Blender, as part of the asset. A kit ships 3–4 pre-varied versions rather than being painted per-instance. In-scene painting is reserved for hero geometry, must be explicitly marked, and is excluded from the batching budget, because a painted instance becomes a unique mesh and loses GPU instancing and static batching.

We can use additional UV channels for overlay textures. Position the 2nd or 3rd UVs to align the overlay where you want it, and it is composited over the base material.

Where the overlay applies is controlled by the vertex colour alpha channel. 0 means no overlay on that vertex, 1 means full overlay. R, G and B are already carrying material blending (see Vertex Painting), so alpha was free.

This is what new assets use. It has no failure mode at distance, adds no shader variants, and survives GPU instancing, because it is per-vertex data baked into the asset like any other vertex colour.

For modular and reusable assets, color variation is crucial. A striped curtain could be one color combination in one house, and another in the neighbours house. This would mean lots of textures, annoying changes when changing the color theme, etc.
Luckily, there is a solution: RGB Mapping!
The idea is simple. When painting a texture for a model, the artist paints that texture in black and white, only caring about values. Then, another texture is created: The Mask. Each channel (R, G & B) will correspond to a color (Primary, Secondary, Tertiary). In Unity, the Mask is then used to tint the black and white base texture to the per-material defined color based on the mask.
Example:
Pixel is fully red and primary color is purple -> Mesh is purple there.

Heres a great example by @minionsart

Some models might heavily rely on damage. For this, you can supply two additional textures:

On top of all that, we layer multiple procedural effects, all configured per-material. This can be: