Motion Blur produces banding

So as titled. I was creating debanding shader to mitigate this effect, but it needs to be rendered before AA. It becomes pointless, as the motion blur is further in the pipeline. Screenshots to compare (I have tuned detail strength, so you can better see the banding):

Motion Blur Enabled

Motion blur disabled.

TSR can handle banding with r.TSR.History.R11G11B10 set to 1, but I want to get bandless image with other anti-aliasing techniques.

After some researching, I have a look into the Unreal Source files, and found this line in PostProcessing.cpp:
const EPixelFormat SceneColorFormat = bProcessSceneColorAlpha ? PF_FloatRGBA : PF_FloatR11G11B10;
If r.PostProcessing.PropagateAlpha is set to 0, there is something, that leads to banding issues. So I set it to 1 in DefaultEngine.ini, and there is no more banding, alternative way to set it is through project setting, it called “Enable alpha channel support in post processing (experimental)”. But I still want to know, what exactly causes this banding, so I can solve this problem without disabling separate translucency.