ID 541925 - Artifacting on dds filetype images loaded onto meshes

Problem summary
Artifacting on dds filetype images loaded onto meshes.
 
Customer reported version
Modo 16.1v4
 
Customer reported platform
 
Steps to reproduce
1) Open Modo and create a Primitive Mesh.

2) Navigate to the Shading Viewport, then press Add Layer > Image > Load > (load image).

3) Select an image that is a dds filetype, then open and observe the mesh in the 3D Viewport.
 
Expected behavior
The loaded dds file should load onto the mesh without any artifacting. 
 
Actual behavior
The loaded dds file loads onto the mesh with artifacting. 
 
Workaround
Unknown.
 
Reproduced by Support in:
Modo 16.1v4 - Windows 11, macOS 11.7 Big Sur
Modo 16.1v1 - Windows 11, macOS 11.7 Big Sur - regression
 
Unable to reproduce bug in:
Modo 16.0v4 - Windows 11
 
Earliest version tested
Modo 16.0v4 - This issue doesn't appear in this version and has regressed.