That's the original image, 512x512. And I've just realized that of course setting U/V_Scale to 10 means that I'm not tiling it, I'm using just a 1/100th fraction of it (a 51x51 pixel square).

Here's a more side-on render with the displacement set to 0.1 as before (left) and 0.03 (right). So the circles are definitely displacement. And when it's reduced to zero they vanish completely.

I guess the answer is that it's a side-effect of using such a tiny image!

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The 3Dcheapskate* occasionally posts sensible stuff. Usually by accident.
And it usually uses Poser 11, with units set to inches. Except when it's using Poser 6 or PP2014, or when its units are set to PNU.

*also available in ShareCG, DAZ, and HiveWire3D flavours (the DeviantArt and CGBytes flavour have been discontinued).