Please keep on reporting these bugs. We did not touch NW. If something happened it is not our fault, it is Taleworlds/Viking Conquest teams fault.
Update: Apparently Taleworlds must have changed how, and which textures are getting compressed when putting Texture Resolution lower.
To fix it, put it to 100% for now.
We will talk to Taleworlds and tell them to fix this, because this is unplayable.