Dgl/gTexManager.cc

Looks like a small thinko here. (around line 121)

GLenum newHint        = GL_DONT_CARE;
   const char* newString = "GL_DONT_CARE";

   if (dStricmp(argv[1], "GL_FASTEST") == 0) {
      newHint = GL_FASTEST;
      newString = "GL_FASTEST";
   } else if (dStricmp(argv[1], "GL_NICEST") == 0) {
      GLenum newHint = GL_NICEST;
      newString = "GL_NICEST";
   }

   sgCompressionHint = newHint;

Specifically:

} else if (dStricmp(argv[1], "GL_NICEST") == 0) {
      GLenum newHint = GL_NICEST;
      newString = "GL_NICEST";
  }

You'll never be able to set the Texture Compression to GL_NICEST as the newHint variable there goes out of scope on the next block and will be GL_DONT_CARE

Simple fix, loose the GLenum in that block and things should work as intended.