My Windows 10 machine, if I start it up before I turn the screen on (DisplayPort connection), shows the login screen with the background picture in what looks like a stretched super low JPEG-artifacted resolution. If I turn the screen on first, or if I use the login screen again later, it's fine. The background image is a local, high-resolution image file on my computer.

It didn't happen in early versions on Windows 10. It started with one of the major updates. My guess is if you don't have a screen on when the login page first shows, it down-samples your background image to some low resolution, and then just stretches it out to fit to your actual screen res when you do turn your screen on.