This just started happening an hour ago and I'm pretty sure I must have done something to cause it, but for the life of me can't figure out how I did it. Can't seem to find a problem like this online either, all of them are usually solved by switching to the correct brush / changing blending mode.
Here's the gist: when drawing with a soft brush, or erasing with a soft eraser over a transparent background, the color appears to be distorted and edges pixelated. It looks just fine over a background, though.
Video attached.
Things I have tried: updated the drivers, checked & unchecked GPU acceleration, reset all settings, all to no avail, the issue persists. The files display fine in other programs, so it must be some view issue in Photoshop itself.
All help is greatly appreciated.
EDIT: Here's an example. The image below is almost entirely black with the exception of a couple of places erased with a soft eraser.
This is the same image opened in Photoshop:
Wet Edges
selected in the Brush settings do you?