I haven't had this problem before. It happened recently. Basically, the image gets pixelated like a Minecraft painting. I don't know what happened. I have Photoshop CS6.
This link goes to a folder in my Drive that has pictures.
Picture 1 shows a blank background.
Picture 2 shows the image I'm going to place.
Picture 3 shows what happens when I place the image.
https://drive.google.com/...sp=sharing
Added (1). Yup, me is a noob, forgot I was zoomed in a ton.