Here are the settings you want to use when you import a low res pixelart character into your Unity 2020 games so that they display properly.

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Game Assets Used in This Project
Red Hood by Legnops https://legnops.itch.io/red-hood-character
Pixel Adventure by Pixel Frog https://pixelfrog-store.itch.io/pixel-adventure-1
Starry Night by Quintino https://quintino-pixels.itch.io/starry-night
Demon Woods Parallax by Aethrall https://aethrall.itch.io/demon-woods-parallax-background