Sprites grey when camera zoomed out

It is possible this could be caused by anti aliasing, though it does appear pretty extreme. Anyway, try going to Edit > Project Settings > Quality and change Anti Aliasing to Disabled, and then see if it still happens. If it does still happen, make sure there is only one Sprite Renderer on your sprites. I can't really think of anything else right now that would cause this, but I would definitely send a report using Unity Bug Reporter.

I had this problem too. It's a texture mipmap problem. When the sprite turns grey, the grey is actually a mipmap of the texture. Mipmaps are like low definition versions of the original texture, and are used when the object is far away, when high detail isn't needed. Unity automatically does this to increase performance...but the texture on your sprite that you are using has no mipmap to draw, so it draws it as just grey when the object gets far enough awa. Just guessing, but the mipmap probably got deleted when you split/converted/edited the png.

Here is some info on working with mipmaps

This annoyed me for literally an entire week. I finally found out how to fix it. Set the texture mipMapBias to a large NEGATIVE number. I was using a 10,000 x 5000 pixel texture for my game map, and when the camera was pulled far away from the sprite to show the whole map, the texture on the sprite would blur to white as if there was fog over it. to Do this you use "texture.mipMapBias = -x"

 using System;
 using System.Collections;
 using System.Collections.Generic;
 using UnityEditor;
 using UnityEngine;
 using UnityEngine.UI;
 
 public class miniMapControl : MonoBehaviour
 {
 
     public GameObject map; 
     public Texture2D mapTexture;
 
     void Start()
     {
         mapTexture = map.GetComponent<mapGeneration>().mapTexture;
         mapTexture.mipMapBias = -5;
 
         Rect rec = new Rect(0, 0, mapTexture.width, mapTexture.height);
         Debug.Log(mapTexture.width);
         Debug.Log(mapTexture.height);
         //last number changes pixels per unit, which would allow the resolution of the texture to be increased
         GetComponent<Image>().sprite = Sprite.Create(mapTexture, rec, new Vector2(0.5f, 0.5f), 1);
     }
 
 }