At 775c (1427F) the board would have caught on fire and turned to ashes
I don't believe it is a bug in AMD Radeon Settings otherwise there would be many other reports from Users complaining about the same thing.
If you use a different GPU monitoring software to check your GPU temperatures and you get the same results then it probably is your GPU card.
Sounds like your GPU card may have a defective Thermal Sensor on it.
I would open a PowerColor Support ticket to see if your GPU card needs to be RMAed to be checked or replaced.