This is expected, since the override switches to an LDR format. Observe that there is no significant quality difference between "Crunched DXT1" and "DXT1", or between "Crunched DXT5" and "DXT5"; it's the jump from HDR "BC6H" to LDR "(Crunched) DXT1/DXT5" that causes the quality reduction.
Work is scheduled to investigate how to inform the user in the UI when non-optimal compression settings are used.