Historically, having HQ resize options had no impact/were disabled when using an external upscale pack, such as the the 2x Neural Upscale pack.
Starting with 4.3.0+ using the Carmack renderer combined with HQ resize options, sprites compress from the bottom up by the multiplier set in the menu as per the attached screenshots. The hardware renderer is not impacted. This problem occurs in the latest nightly from DRD Team, and also did not exist in 4.2.4 or older.
I utilise such a configuration to apply a slight 2x upscale on other games such as Hexen, Heretic, Freedoom etc that I do not have such a pack for.