I have tried importing my pixel art into unreal engine 4 with different settings applied. for ex. the paper 2D preset, aswell as changing the Compression and Detail settings by hand. I have gotten the image to charpen to some extent with these settings, but there is still an unknown sorce of distortion adding random blur to the edge of some pixels and changing the color / shading of them. Im having the same issue with other pixel art assets im trying to add, but I have older assets iv imported a long time ago that seem to have the same settings, and work fine from what I can tell. This negative black and white texture has a few white pixels and other distortion also that isnt really explainable either