Changing textures to 512x512 results in visual errors

When changing the textures from 16x16 to 512x512 it results in a darkened environment. It (seems to) directly affect the lighting. The textures are also not stretched to their intended size and only a portion of the texture is displayed.

Time was changed in the game from 0 to 6000 to test and it remained dark, while entities were bright and visible.

You can see the textures on the birch trees in the screenshot provided and how the full image is not displayed. You can also see how dark everything is.