Here is a very handy change to AutoCAD 2016 made after customers requested the functionality to change properties of Layers in an AutoCAD XREF.
When the AutoCAD System Variable XREFOVERRIDE is set to 1, you can change the Color, Linetype, Linewidth, Transparency and Plot Style of objects in the XREF drawing or nested blocks by changing its original layer property in layer palette, in spite of the legacy ByBlock rule.
Thanks to AutoCAD team member Tao Zheng for the heads up tip on this new addition to AutoCAD 2016.
A good question was posted in the comments and so I am adding the response from AutoCAD UX Team member Karen Mason.
How is XREFOVERRIDE different than the function of VISRETAIN?
“XREFOVERRIDE works in conjunction with VISRETAIN. XREFOVERRIDE is only necessary if you want to change the xref layer's properties, AND the xref drawing has some objects where their properties are not set to BYLAYER. If previous releases, if the xref has objects with specific colors/linetypes/etc. (vs. BYLAYER), changing the xref's layer properties had NO effect on those objects. Now, you can set XREFOVERRIDE to 1 and AutoCAD behaves as if those xref's objects had their properties set to BYLAYER.
XREFOVERRIDE Help- https://help.autodesk.com/cloud...”