I also noticed this. I think it's since an update several months ago, can't tell which one exactly. Before it pictures would appear sharp even in the thumbnails. If it's a traffic or RAM-conserving measure maybe it makes sense to make it optional.
this post was submitted on 22 May 2025
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Isn't there already an option for "convert images to webp" that fixes this issue?
Tried it, it's not that.