The app is called Nexus 7 II Tester
https://forums.androidcentral.com/e?...token=5uKUw4BN
While checkerboard patterns like this aren't found most of the time in general use, I wonder if some of the crashes people have when using the keyboard/general usage could be a result of this behavior expressed differently. The theory here is that the electronic noise the individual pixels create (one on and the adjacent one off) might be picked up by the digitizer (which I believe is integrated into the LCD panel in this new model) in the same way a finger causes some sort of electrical bridge or however it works.
For example, the keyboard has a gradient background. I'm not completely sure, but it looks like the LCD display is actually only 24 bits, so it may use some dithering to achieve a perceptual equivalent of a 32 bit depth. Perhaps some of the dithering artifacts could trigger this behavior as random touches on the keyboard.
When I've used the screen tester app by the same author of the app linked above, I saw that app crash when the digitizer freaked out. Perhaps something about the coding of the app not anticipating/handling the thousands of random "touches" all over the place.