To understand why this wouldn't work, you have to understand Godot's rendering pipeline. In 3D, the first objects Godot renderers are ones with a solid material, i.e. materials that neither-
- Are transparent.
- Use the temporary screen buffer.
These solid objects are the ones that get rendered into this screen buffer, which by the way is the same texture available in a shader as
It is this texture that
SpatialMaterials use to render the refraction effect. So they don't actually blend with the background like transparent materials normally would.
So with all these facts we can now come to a conclusion. Since transparent objects don't get captured in the screen buffer, they will not show up in a refraction.