[Unity3D] Sprite not rendering correctly when it's too small? (Appearing like a blob)

T$$anonymous$$s issue has been tripping me up for quite a w$$anonymous$$le now. I'm using a sprite to mask out a portion of the cameras output using DepthMask (http://wiki.unity3d.com/index.php?title=DepthMask).

T$$anonymous$$s actually works for the most part, but the problem is that for some reason when the sprite is too small, the sprite is rendered blurry/blob-like. (I've disabled the DepthMask transparency material to show what I mean).

For my test image sprite of size 1080x1920 (https://imgur.com/a/LAH6RQ7), the sprite renders as expected:

However, when I reduce the size of the exact same sprite to 400x711, it's rendered like a blob and I can't figure out why.

I've reduced the size to that to make the effect more obvious, but it's noticeable even with images just a little smaller than the original. Also I've removed the material to make it visible from outside play mode, but of course when I assign the transparency mask material the resulting mask also appears blob-like. If it helps, I've included screenshots of the inspector for the sprite in the imgur album (https://imgur.com/a/LAH6RQ7).

No idea at all what could be causing t$$anonymous$$s, out of ideas. Please help