I think this is device-specific feature, but not sure
Noticed same problem in “Sun Temple” project deployed from UE4 version 4.13 few weeks ago. There is some material with rocks and grass with 2 customized uv channels also, and it’s pixelated in the same way.
Additionally, everything in the pixel shader on mobile is evaluated with half precision floats. This causes blocky looking textures and some other artifacts, when pixel shader math is done on texture coordinates. The Customized UV inputs however are done with full precision so they get around this problem.