Don't know for sure, but maybe it has to do with mipmaps viewed at some near-parallel angle? Straight on, it appears fine, at a no-so-steep angle, it has little distortions, but when nearly parallel, the distortions are extreme. If this is the case, it's supposedly how mipmaps are. I don't know for sure. If you mean the odd smoothing effect, the only way to fix this, or to make it less visible is to not have a hard edge. Use anti-aliasing in your texture or disable the filtering (check the "nofilter" flag, of which only works for models as far as I know).