32bit TGA Texture With Alpha Has Noticeable Artifacts On RGB Channels (DXT5)

When using a 32bit tga with an alpha channel that has hard edges the compression method (DXT5) will create artifacts in the RGB channels that normally aren't there whit DXT1 compression(no alpha).

You can check "compress without alpha to see the difference

I believe this is due to DXT compression having a hard time dealing with small areas of high contrast. Reducing the contrast of the alpha channel by setting the Min Alpha value to 0.1 significantly improved the artifacts.

1. Import attached TGA file into any project (MetalPaintedAlpha.tga)
2. If the engine imports as normal map make sure to revert
3. Open the Texture and disable the alpha channel's visibility using the view settings

RESULT
Areas along the alpha mask have noticeable artifacts (see screenshots for comparison)

EXPECTED
The compression method gives a similar result as DXT1 (without alpha)

Texture compression artifacts when using alpha