Warp Projection incompatible with Normal Maps?

I spent hours on this problem before finding the cause. 

I'm trying to create some decal materials but for some reason the normal map kept looking wrong. 

It seems the issue is "Warp Projection" which seems to be the default when holding alt to add as a decal.

in the below image the top is warp pojection while the bottom is UV. The issue also does not occur in Planar Projection mode.,