The point isn't that it's digital but that it's small units that blend into bigger units.

Animals do https://www.google.com/search?q=bird+camouflage

Most animals test things in a manner that relies on stumbling upon answers, but humans have evolved the ability to systematically discover things like this.

Because a zebra is hiding from a tiger, since long before humans with ranged weapons were on the scene.

If internal combustion engines work so well, why don't animals use it?

Engines (or wheels) need independent moving parts, high temperatures, which is hardly compatible with what's allowed by anatomy and biochemistry. But there's nothing obviously stopping animals from evolving any particular pattern of skin markings.

Skin markings are pretty complicated for an animal. Each cell somehow needs to "know" what color it should be, potentially different from its neighbors, without carrying any information unique to that cell.

Imagine billions of LEDs, and you want to make them display a picture, but you separately program them, you can't address them individually, and you can't even really have them talk to each other. You can sort of flood them with broadcasts of different strengths to influence how they turn on. The sorts of patterns you could form would be fairly limited.

It seems like something is in fact stopping animals from evolving a pattern such as digital camo. I would think that entropy would lend more to the splotchy skin colorings we see on virtually all animals (with hair) versus square "digital" style blocks.