While it will not be edge-perfect because it is still a stretched image, I'm only able to reproduce the extreme blurriness in Chrome (though I imagine it happens in Opera and Edge with the same codebase). Safari to me looks the same as Hype, which is what I would expect.
I tested against Chrome Canary version 96, and it appears fixed there. I'm guessing it is a Chrome bug. Does it look better for you with that version?
If you can still reproduce in Safari and Firefox, please let me know which versions of macOS, Safari and Firefox you are using, along with your basic monitor setup (how many, which are retina, etc.).
It does look like a workaround in Chrome is to uncheck Use WebKit graphic acceleration in the Document Inspector.
This is due to perspective. You can put 3D rotated items in a group and if you change the group size/position to change it. Alternatively you can override Hype's CSS like mentioned in this post:
You can probably do similar stuff with the perspective-origin property which may also help depending on your usage.