Terrain texture from spritesheet?

I’m experimenting with pixel art in a 3d world. I created a test terrain object and wanted to apply some pixel art textures to it. I had a spritesheet that I’ve imported, marked as a sprite without compression/point (no filter), sliced properly, but it seems that when I want to add a sprite to my texture it will only use the entire texture.

Is this accurate? Do I need to change my sprites to individual textures for this to work?