I think people know I'm not normally one for piling on our distributors with small criticisms, but on this occasion I don't think there's any defending this - Yeah, that banding is awful and incredibly noticeable. That picture quality might be acceptable on a streaming service you're paying a few quid a month to watch as much anime as you like, it's not acceptable for a £40+ for 12 episodes Blu-ray release.
As others have said, if a compressed pirated rip of the Japanese Blu-rays has better picture quality than the official western release, that's pretty terrible. For everyone, ultimately, including the creators, Funimation, Anime Ltd. and fans who want to support legal local releases. It's especially bad if video and audiophiles - The people most likely to shell out for a home media release in the belief it will offer them the best quality - come to believe piracy is a better option for them than legally purchasing. So it really is in everyone's interest that this sort of thing definitely stops happening.
I think apportioning blame is kind of irrelevant at this point, it's happened now, and I'm more concerned about the possible effects. If potential customers think this is the kind of quality they can expect, it will put people off pre-ordering. It will put me off pre-ordering until I can verify that the picture quality is what I'd expect for what I'm expected to pay. I think what would go a long way to easing my mind would be hearing from Funimation and Anime Ltd. that they don't consider this picture quality acceptable and that they won't allow a product with picture quality this poor to be released again. I don't really think that's too much to ask and if it is too much to ask, that's a bit worrying.
I say all this as someone who values very much the way Anime Ltd. has been bringing us physical anime releases and as someone who wants to continue to support them in future. But I couldn't support a release like this.