Do you have another 480p console you can test with the OSSC? Your screenshot looks fine to me. Just from the small amount of evidence present, it could just be the lack of image processing (now that you lowered sharpness) is different than what your PC monitor does to the VGA signal.
You should really get a remote for the OSSC. Adjusting the settings makes a huge difference. I don’t think I have a single console that looked ideal just using defaults.