I’m not entirely sure why people like this but they do so I learned how to do it. Please note, this is one of the easiest things to screw up. Start with a NPC or a model with very little gear on until you’re sure you understand the prodedure. I’ll use my standard Tarudin because I’m a boss like that.
Of course you’ve imported a model and grouped it, and arranged your viewports however you see fit. Open the Material Editor and get ready to stare at it for the next 10 minutes. Click on the first sphere then open the Material menu and select “Pick from Object”. You’ll get a little dropper, which you should use to click on your model’s hat (or face, if not wearing a hat…or body if it’s a mob without clothes).

The first sphere will now contain the material of your hat/face/whatever. Leave it alone for now. Click the sphere under that one, then the “Get Material” button. Double-click “Multi/Sub-Object” and close the Material/Map Browser window.

Now click the “Multi/Sub-Object button, then double-click “Ink ‘n Paint”. The second sphere will turn blue and the Material Editor will change again.

Click the “none” button and double-click “Material to Shader”.

Now click on the top sphere and drag it to the “none” button. When you release a new window will pop up asking Instance or Copy. Instance should already be selected, so just click “OK”.

Both spheres will look the same now. Click on the BOTTOM sphere and drag it to whatever part of your model you originally took the material from. When you release the mouse, that part of your model should turn blue. If a box pops up and asks “Apply to Selection” or “Apply to Object”, pick “Apply to Object”. If you mess up and pick “Selection” the whole model will turn blue and you have to start all over again.

Repeat these steps for each part of your model (moving to new spheres for each model part) until the whole thing is blue. Some parts of these models are made up of several materials; for example, the body here is in 3 pieces. Just drag the material from your bottom sphere onto non-blue parts until it’s all blue.

Here you can see my entire model is blue. Each section of the model has 2 spheres on it, and my model had so many parts I had to go into Material Editor Options and expand the number of available slots. Left to right, the first 2 rows of spheres contain helm, face, body, sword, shield. The 3rd and 4th rows contain hands, legs, feet.
And now the final effect:

Nifty I suppose.