Thank you for the excellent bug report. With your help, we were able to reproduce this in our testlab.
Unfortunately, this is a driver problem. We specifically tested for this issue on a GPU matching yours (as listed in DXDiag) and saw the issue. Then we tested on a 1060 and saw the same problem. Updating the driver solved the issue.
The problem is that the GPU you have is quite old (almost 12 years), so NVIDIA dropped support for it in their drivers around 4 years ago. I believe you have the latest driver installed for your GPU. We are extremely limited in what we can do here, as the problem is being caused at a very low level between the driver and hardware.
We have an internal defect on this to see if we can make some changes on our side to get around it, but I can’t promise this is even an option.