How to reproduce:
1. Open the “IN_69052” project
2. In the Build Settings make sure the Android Platform is selected
3. In the Project Window select the “UIBulletIcon” texture (located in Art/Sprites/UI)
4. In the Inspector make sure the Format is set to “RGB Compressed ETC 4 bits“
5. Open the “SampleScene”
6. Observe the image in the Game View

Expected result: Texture has a transparent background
Actual result: Texture doesn’t have a transparent background

Reproducible with: 2021.3.35f1, 2022.3.20f1, 2023.2.0a18
Not reproducible with: 2023.2.0a19, 2023.2.11f1, 2023.3.0b7
Fixed in: 2023.2.0a19

Reproducible on: Windows 10 Pro, macOS Ventura 13.5.2 (M1)
Not reproducible on: No other environment tested

Notes:
- Not reproducible on the Windows Standalone Platform (no ETC1 compression)
- This issue only reproducible on the Android Platform
- Also reproducible in the Android Player
- Also reproducible in the Play Mode
- When the “ETC1” format is selected in the inspector warning is shown “Cannot compress to ETC1. The split alpha channel and compression to ETC1 requires a packing tag.”
- User mentioned this issue is not reproducible with 2020.3 LTS but I was still able to reproduce this issue on 2020.3.48f1 because of that I’m not searching for the regressed version since most likely it happened in the 2020.3 stream and it would take unreasonable time to find it