After clarification with Kuan, the issue now is that:

When a master and variant atlas are both "Include in Build" enabled, and there is a sprite that is included in both, it is non-deterministic as to which atlas will be used.
There should be a warning to inform the user of this, otherwise they might encounter a case where the master sprite is drawn in one scene, and the variant sprite is drawn in another.

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1. What happened
Sprite resolution doesn't get affected when Variant scale is adjusted in SpriteAtlas

Steps to Reproduce:
1. Create a New Project and Import a Sprite.
2. Create a MasterAtlas and two Variant Atlas, using the same Master
3. Add the Sprite to the MasterAtlas
4. Set first VariantAtlas scale to 0.5, second VariantAtlas scale to .125
5. Drag the Sprite into the Scene
6. Press Play to Run the Scene.

OR

1. Open the Attached Project.
2. Drag and drop the Sprite in Scene
3. Press Play to Run the Scene

Expected Result:
Sprite should appear extremely blurry.

Actual Result:
Sprite is appearing clear.

Environment:
- Appears on both platforms (Mac and Windows).

Frequency:
- Appears Always.

Reproduces on: 2018.1.0a7, 2018.1.0a5, 2018.1.0a2, 2018.1.0a1
Working fine on: 2017.3.0f2, 2017.3.0f1