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!
image
image

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