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Does turning on »Deactivate Native Canvas« (Photoshop > Preferences > Technology Previews) and restarting Photoshop have any bearing on the issue?
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Oh my gosh, THANK YOU!! This has been driving me crazy for months. It was only doing it on my laptop and not my desktop and I couldn't figure out why.
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It usually occurs when there is too much display area for the image but there is no sufficient data to view the image.
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Pixelation can also occur when you try to convert a low-quality image into a high-quality image.
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The error was resolved by updating mac os from 10 to 11.