At 8 bpp the effect is only colors moving vertically, up and down. After a while digging into it I realize why: most colors are too dark to be visible, we only see the most significant bits in each channel. And when those bits influence left or right the consequences are not visible.

Maybe I should try 2bpp. Or some HSL where I can clamp L.

Edit: Oh yes, it's interesting at 2bpp!