Yeah, this does not seem OK at all. I never even think about it because it has always worked for me - UE4.
If you don’t mind:
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if you now stretch the image manually in the canvas, will it appear blurry as if it actually was 32x32?!
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if you flag the canvas slot as
Size To Content, will it became a tiny 32x32 in the designer? It’s now 100x30 most likely. -
does this affect all images, even the ones from the engine?
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how is this for your own image:
I looked at the bug DB but I see no public issues related to this. It might as well has yet to be reported. There was some regression in UE5.