Looks like a problem with dynamic range, red channel saturation and the jpg engine, shooting B&W will only make it worse as the setting you are using is high key with a strong contrast curve.
Shooting in raw to recover the highlights and under exposing a bit more will help although you won't be able to shoot with M and auto-ISO and use exposure compensation so you will need to use a semi-auto mode, probably shutter priority.
edit: to add, it's not a fault with the camera per-se, just that you are using it non-optimally in an extreme situation.