Have you tried this one from NVIDIA ?
https://developer.nvidia.com/downloads/texture-tools-standalone-app
Using the BC3 (DXT5) preset works fine
In my opinion, your gray texture becomes green and transparent, as if one color channel (Most likely the Red one) was stored in the alpha channel instead (This may happen to some DDS used for normal maps)
Could you please send your base texture and your green output ? (not screenshots ofc)
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