Objects that are part of a Prefab can either be part of a regular Prefab or a Prefab Variant, not both. Which type of Prefab they are part of, depends on their outermost Prefab Instance root (https://docs.unity3d.com/ScriptReference/PrefabUtility.GetOutermostPrefabInstanceRoot.html). When a Prefab Variant is nested inside a regular Prefab, the outermost Prefab Instance is a regular prefab, which is why the API call returns false. This was indeed unclear in the documentation, which is why we will update this to clarify it.

To find out if a given object is part of a Variant Prefab at any point in the nesting chain, you can use the following script:

[ExecuteInEditMode]
public class PrefabVariantTest : MonoBehaviour
{
private void Start()
{
bool isPartOfVariant = false;

Object obj = this;
while (obj)
{
if (PrefabUtility.IsPartOfVariantPrefab(obj))
{
isPartOfVariant = true;
break;
}

obj = PrefabUtility.GetCorrespondingObjectFromSource(obj);
}

if (isPartOfVariant)
{
Debug.Log($"{gameObject.name}: VARIANT");
}
else
{
Debug.Log($"{gameObject.name}: NON VARIANT");
}
}
}