Going from RGB to Index mode deletes some colors even when below 256?

[Dao Puppy]

It seems to happen with low contrast colors. If I start a new canvas (RGB) and make just two colors that are within 5 or so integers in their channels to each other, then convert it to Index mode, I'll only have one color left. It seems to only happen if the RGB differences are slim but it's still quite noticeable for some color combinations.

Is there a setting in the Index conversion or somewhere else that I can toggle that would make the conversion more accurate or is that a bug? I've been trying to bring in images from Photoshop with the exact colors but this is kind of throwing a wrench in the works.

Thanks for any help here.