Looks like you’re having slow transition issues. Both sides of the letters have an equal shadow so the sampling is correct.
Try to disable Video LPF (not Sync LPF) and tweaking sampling phase. I’m guessing you have a N64 modded with a 7314 amp which has an LPF so it could caused by having both LPF enabled.
BTW you should tweak the R/G/B gains because the white background is a bit dark. The white color here should be around 248.