Could it be that it just uses the image and not the repeated version?
No, it's definitely using the repeated version.
Possible fix could be to use multiple smaller cubes or use a mesh distort to position the tiledbg where the face would be.
Using multiple cubes unfortunately isn't viable due to the complexity of the level design.
As far as I can tell, using object images for faces on 3D shapes seems to be bugged. No amount of messing around with the settings seems to have an effect.
EDIT:
I found out what the issue was. Apparently the setting "Z tiling factor" causes the toolkit to try to fit repetitions of the image into the Z-axis, by whichever factor that you input. For some reason it defaults to 8, which causes texture to get compressed 8 times on the Z axis. Setting it to 1 fixed the problem.