Thank you all for your replies but I don’t think this problem will go away with time. As a matter of fact after scouring the internet up and down I came to the conclusion that this is just a nature of the beast.
You see I don’t have that problem when playing on single string or playing slower tunes. This becomes audible on faster tempos and only when playing 5th’s, octaves or basically anything that involves string crossing. When you pluck fretted string and then release the pressure but still not lifting your finger away from string (ie. left hand muting), that string still vibrates so it’s going to buzz on it’s way up no matter what. This is just physics and I’m not aware of any left hand technique that can elevate this problem. I’ve seen people recommending laying all your fingers across the string but good luck playing anything faster with that. Another thing that works is using my thumb instead of index finger which gives me extra finger to do the muting but I don’t like playing like this…work great for octaves though.
Only thing I’ve seen that completely removes this issue is using your right hand to mute, but this involves some serious finger gymnastics that would require rethinking everything I learned so far and it’s just not worth it. Check this video of Garry Willis (starts at 11:48) and he is talking about exact issue:
Gary Willis Progressive Bassics
After watching this video I kind of felt discouraged so I decided to check as many isolated bass lines I could find to hear how they sound. If we are talking soul / funk / motown / jazz / blues genres, these guys play with their tone rolled off and without treble so that buzz is barely audible. Rock / Metal genres have very trebly / metallic sound going on so this kind of buzzing comes natural at those settings. But all those bass lines had something in common, THEY ARE NOT CLEAN SOUNDING and this is something I foolishly obsessed over.
So anyway, I decided to just continue practicing and play the damn thing cause it’s awesome