I can't get this texture to be smooth in-game

In editor zoomed-in: its smooth

Zoomed-out: its pixel art

In resource tab: it is smooth

In-game: its pixel art

Version 5.3.186
Linux Arm64 AppImage
I already tried closing and re-opening the project, even re-uploading the texture. I am having this problem since 2 days.

Turns out that in order for the box texture to get smooth, I have to smooth the player texture for some reason!

Even if not marked as smooth, as long as the player texture is smooth, the box will also be smooth.