3RUN is right. Uncheck the "Create Mesh" flag in the map compiler options.
Have a look at the online GS Manual at "Create Meshes", there is a small explanation, why this feature exists.
Google "Static meshes" and you will get a deeper explaination from the Unreal page.
I own A8 Extra Edition and animated block textures did not work unless I unchecked the "create meshes" check box. The Texture animation worked again, but the attached tplayer walk script forced my player to slowly lift upwards. Needs to be modified for this mode in A8 I guess. A simple walk script however worked, together with texture animation.
I use my old A7 Extra editon mainly to get texture animation, use Tplayer scripts for certain projects and work in a good workflow until I solved the A8 script prob.
With A8 , if you dont have shader features, I recommend animated sprites or skin animated mdls to create water or flow FX, perhaps with uv shifting as some kind of bypass.
Looks as if texture animation and shaders exclude each other somehow by default, if I understood the explanations mentioned above correctly.
Hope that helps.
A8 Extra 8.47
A7 Extra 7.01