Correct: at least for the recreated version[1], the blocksize is 128 but the pixels are uncompressed 24-bit RGB values. So you end up with 5.33 (repeating) pixels per block, which makes running spans of of the same color transform into runs of a
different color with a little bit of "noise" (always the same) at the end.
Do that enough and wrap it around at the width, and you end up with a diagonal/houndstooth-like pattern.
[1]: https://words.filippo.io/the-ecb-penguin/