Masks uses the same DXT1 compression as the default setting. It’s a useless option imo, since all it does is change the sampler type potentially breaking existing materials if you change the texture afterwards. Otherwise, it’s no different.
I would try two different options though. If your emissive mask is a single channel texture, with nothing else in the other channels, set the compression to Grayscale. That will use all 8 bits on a single channel. If your emissive mask is in a texture with other channels used for other things, then try the BC7 option. I forgot the exact compression method, but it’s higher quality than DXT1 so it should reduce the stair-stepping. I believe it compresses the channels separately, so it’ll reduce the cross-talk if your other channels have different information. Both of these will increase file size, but sometimes with the higher compression you can down res the texture by another level(1k to 512, for example) and not have much difference in visual quality.
However, I’ve never used Paintstorm, or Gimp, but if your texture after saving includes those artifacts(unlikely since I don’t think other non-realtime compression algorithms have the same compression pattern), then it’s certainly with the tool and not with the engine. But the screenshots looks identical to a pretty common issue with textures in Unreal.