To reproduce:
1) Open the attached project and sample scene in it
2) Select the Terrain in scene
3) Select the Paint texture tool
4) Select the yellow "New Layer 1"
5) Open Project Settings...->Quality; and notice that it is not set to "Full Res"
6) Attempt to paint on the terrain.

Expected: The texture paints okay
Actual: It does not

Workaround: Have Texture Quality set to Full Res - texture painting then works perfectly. Also notice that when you switch from Full Res to X Res back to Full Res, it seems to stay at X Res until you paint new texture

Reproduced in 2018.3.0b1, 2018.3.0b12, 2019.1.0a11
Not reproduced in 2018.2.19f1