Use PNG format for small images
Teams seems to use the JPEG format for all images pasted into it, regardless of the size. This format makes pictures such as screenshots look absolutely horrible, with artefacts going rampant around any text or other sharp edges. A lossless PNG format would be more suited for the task.
Eric Moyer commented
This is my single most hated Teams issue. We send app development screenshots (PNG) back and forth all day in Teams and they get muddled into blurry JPEGs. It's extremely frustrating that I can't copy/paste my screen to a co-developer and get a crisp reproduction. Every pixel matters in app development. We are forced to exchange screen shots outside of Teams when we need high fidelity. Please honor PNGs!
Can't believe this hasn't been fixed after 3 years. Images in MS Teams look disgusting compared to Webex.
Makes Teams completely useless when trying to share screenshots for QA purposes.
Agreed! So annoying, pasting small screen snippets is very useful, but the quality is worse than sending an email with Outlook default settings.
Leszek Ciesielski commented
Especially when pasting a .png screenshot - Teams converts it to .jpg (with aggressive compression settings), changing the colours and making straight lines jagged. Compare to Slack, which keeps the .png format, even through resizes for smaller windows (and makes the original image available to view).