Blur is applied to pack icons in the resource pack selection screen.
This is most noticeable when the icon is a small resolution, such as 16x16.
This was not the case in the previous version 1.21.5.
The pack icon’s blur cannot be disabled via a pack.png.mcmeta file.
The menu background blur is not causing this. It seems they just changed how pack icons are scaled up. e.g. it changed from nearest neighbor to bilinear or something like that.