I’ve checked in a fix for this issue into main (so it’ll be in 4.8 for sure) and nominated it for inclusion in a future 4.7 hotfix. https://github.com/EpicGames/UnrealEngine/commit/1310aaef6d7a11b8e3caf9921455a1038576a4e4
However, I do have a workaround to suggest for now:
Open the Textures folder and right-click reimport on the individual texture pages and then reimport the sprite sheet asset. This seems to solve the issue in the repro case I was given.
Cheers,
Michael Noland