My colleague said it used to work...
After creating a color theme using the Theme Builder and waiting for the updates to finish on a Figma file, I inserted a new component from the Figma Material Design Kit, but the component still used the old color theme. I can manually change the selected colors to the new colors that are generated--but have to do that individually. Alternatively, I have to manually select all the components and apply the color theme through the plugin.
MD Theme Builder:
https://www.figma.com/files/team/1070102050025399407/resources/community/plugin/1034969338659738588/material-theme-builder?fuid=940786524780668914
MD3 Kit:
https://www.figma.com/community/file/1035203688168086460