Why the use of words like “harsh” and “glaring flaw”? Very poetic…
As already said, this is what all NES/Famicom consoles output and TVs usually mask/crop the edges of the image (called overscan area),, nothing to do with the RetroTInk2x.
Exactly the opposite from what you said about “signal preservation”, the RT2x preserves the original signal and does not crop it.
Also, captured video is edited and cropped so the content creator will remove this overscan area and readjust the aspect ratio.