Banding due to automatic downconverting of RAW files to 8 bit

I'm running into an interesting problem that I can not solve on my own.
It appears that Photoshop or the Adobe Camera Raw Editor is automatically down converting my 14 bit Canon RAW files to 8 bit depth.
I took some photos to illustrate my problem and maybe someone can shed some light on the issue.
So here you can see some very serious, very bad banding. In my workflow options at the bottom you can see it says "16 bit". You can also see that this is a CR2 RAW file. It says 16 bit but it's plainly obvious from the extreme banding that the photo has been down converted to 8 bit.
As a comparison I opened up the same photo in Canon's "Digital Photo Professional 4" software. There was no visible banding and I exported the photo to a TIFF. Here is that photo being displayed in PS:
So, the exact same RAW file processed through "Digital Photo Professional 4" to a TIFF shows no visible banding. It appears that Adobe Camera Raw is downconverting my RAW files to 8 bit automatically.
It is clearly not a display (dithering) issue, as you can see it looks fine in the file that was processed with Canon software.
I have done a lot of searching and have not found a solution but I do not understand what is happening here. I have found threads where people have the same issue but none of the answers provided actually solve the problem.
If I do not find a solution my only option will be to do RAW processing in the Canon software which is not as intuitive, nor do I like as much, as PS. I would really prefer to do my RAW processing in PS but it will not be an option for my unless I can get this automatic down converting of bit depth figured out.

I was kind of hoping maybe you would ascertain from my writing that I have a level of technical knowledge that puts me well ahead of a solution of "playing with HSL sliders"...lol
Look at where the blue light hits the upper left corner of the forehead. Or the blue light on the white shirt. It should be a smooth gradient but instead it is banded very heavily. I don't understand how it is possible that you could not see this. It is very blatant and obvious.
I am not referring to any oversaturation. I haven't pushed or pulled HSL at all. Pushing or pulling won't do anything. Heck, if I convert to grayscale it will still look like crap because it's banded...
I am referring to the sections of color that should be smooth gradients but are instead blotchy patches. It is where blue light and red light meet and mix.
You can see it very clearly here:
If you can't see it there something is definitely wrong with your eyes or monitor. Maybe your GFX card has some automatic intelligent dithering to it... I dont know... Looking at this on 3 different displays it looks the same on all of them.

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