Severe banding when using "render cache clip source"

MESSAGE EDITED WITH ADDITIONAL INFO:

I am seeing severe banding on my image in the following situation:

Source footage: Sony FS7 MPEG4 XAVC 1080p 23.976 (MXF container), Slog3
Render cache clip source turned ON (Cache format set to DNxHR HQ) -- also with Optimized media

Banding becomes visible in large uniform areas (such as skies and walls) when normalizing the image (whether using a LUT or simply adding contrast has the same effect). It does not show up in every shot, only in those where uniform areas make up a large proportion of the image. The banding is visible on the reference monitor, UI display and in final outputs (using cache for renders was ON).

When I work directly from the MXF XAVC files (no source caching), the banding disappears. Banding appears when using Input source cache or optimized media to the DNxHR HQ codec, which is a 4:2:2 8-bit codec (EDIT: I thought it was 10-bit... I am used to Macs and Prores, so I made the wrong assumption there). Clearly, there is no significant banding in the original footage, because my outputs are clean when I don't use caching.

I tested the following scenario with optimized media set to:
DNxHR HQ: severe banding
DNxHR HQX: no banding
Prores 422: no banding
Prores 422 HQ: no banding

clearly, one should never use DNxHR HQ for optimized media.

I also tested with files transcoded with Adobe Media Encoder:
transcoded to DNxHR HQ: severe banding
transcoded to DNxHR HQX: no banding
transcoded to Prores 422: severe banding
transcoded to Prores 422 HQ: severe banding

Strange that the Media Encoder Prores files show severe banding, while Resolve's optimized media shows no banding when using the same codec. I can't explain this.

Tested on both a Mac and PC with similar results (Resolve 14.3 and 14.2 respectively)