well, I am not Steve or Ted, but tested it briefly a two or three days back, as described at a post above. my 2c:
a dynamic scaling worked. from a small object to bigger upscaled one, smooth transition. EDIT: I did a wheel tire, gear door and spoiler tests, 0-50 keyframe range.
if the export from gmax to m3d does not display any scale warning, it works ingame as in the gmax editor preview.
if any scale warning when export appears, its bad, when ignoring such warning, the m3d skips the problematic object export. however the scale reset is allowed for the current keyframe, so it is possible to get the success stage.
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