Solved: this is caused when a texture has a wrong pixel dimension, example: emerald texture of 15px while it is supposed to be of 16px.
I'm experiencing the exact same issue in 1.16.4 VANILLA.Using server resource-packs makes all look grainy.
Cook White
Solved: this is caused when a texture has a wrong pixel dimension, example: emerald texture of 15px while it is supposed to be of 16px.