When I place blocks and walk away from them a weird blur takes over as seen in the picture below. I also did mess around with my minecraft settings.
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@unknown You are correct.
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In my opinion, this is correct behavior. As lines get smaller and smaller, they create aliasing and interference patterns that cause them to get distorted. By blurring the textures, you prevent this from happening (see this image attached to MC-234358, for example).