Hidden/InternalErrorShader - fix "material was not upgraded"

When the URP material upgrader throws the message below, Unity failed to convert a Built-in Render Pipeline material:

atlass_1 material was not upgraded. There's no upgrader to convert Custom/Diffuse shader to selected pipeline
UnityEditor.Rendering.Universal.UniversalRenderPipelineMaterialUpgrader:UpgradeSelectedMaterialsMenuItem () (at ./Library/PackageCache/com.unity.render-pipelines.universal@14.0.11/Editor/UniversalRenderPipelineMaterialUpgrader.cs:62)

A few users reported the same symptom in the Unity forums:

https://discussions.unity.com/t/cant-upgrade-materials-textures/779770/34

Warning: This process is irreversible and will permanently change your materials. Create a backup first.

1. Reimport broken material package (do not delete the broken shader materials)
2. Go to Window → Rendering → Render Pipeline Converter
3. Select Built-In to URP from the drop down list
4. Check Rendering Settings and Material Upgrade
5. Select Initialize Converters (this will add all the materials in the project to the queue)
6. Click on Convert Assets button