Blend file: https://drive.google.com/file/d/1qOShk5-Qa61Y3lZghscwfCi7ogJxM3vu/view?usp=sharing
Textures: https://drive.google.com/drive/folders/12TesRIClLJIZXKfPR-qHR_8AdhQNv5SI?usp=sharing
P.S I tried to upscale the decal but it didnt help
maybe the texture you are painting on needs a higher resolution?
Try going to the image editor > Image > Resize and double the resolution.
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The problem isn’t your decal texture… is the Hazmat_suit texture that is too small.
Blender tries to paint the decal in the texture from UV coords of your brush, but the area of the brush doesn’t have too many pixels to store the decal without pixelating it.
You could rescale your Hazmat_suit, and you could also scale the UV islands for them to hold more pixels.
Another option is to use a mesh decal… for example, a subdivided plane with a shrinkwarp modifier.
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Thanks for the answer guys!