Yesterday I tried using tiling normal map (generated new tiling diffuse and corresponding normal map using Substance Player and one of the free available substances). Didn’t get any “pixelation” or any other artifacts.
Is there a way to have no compression on normal map texture (to use RGBA instead of Normal DXT5) ? If I could use uncompressed normal map, I could verify that those are texture compression artifacts or not (and perhaps could use uncompressed global normal map for my terrain).