
After a while I realised this happens when the user is impatient and press a key to skip the loading sequence. Problem solved? There was one issue though

This happens only when the panel is unlocked, and it happens even when the level textures are allowed to fully load. Switching renderers or using restartvid after unlocking will change it to the correct texture. More puzzling, key panels on other levels load normally. Then it hit me. Most levels have a blue keycard reader, Hollywood Holocaust has only the red one. I then tried to find other levels like that, and indeed, Incubator has only a yellow keycard reader and exhibits the same behavior.
(I forgot to take a screenshot, but the unlocked keycard reader looks exactly the same as the locked one anyway)
Bonus: Playing with filtered textures bypasses the glitch. So if you're impatient you can still play Total Meltdown without loading screens as long as you're willing to play like a chicken.