Thank you for your response and sorry for mine being late again. The video and the information you provided gave some clues.
The video input (and thus also the output) seems to be pretty much standard 525i NTSC. From the video it seems as if this could be a problem with field reversal, as details in the supposedly static elements of the UI are constantly “twitching”.
On the other hand, the shimmering could be caused by the inherent weaknesses of composite video signals. For instance, this Youtube video seems to show a similar effect, although the video is rather blurry and I don’t know how it was captured: https://www.youtube.com/watch?v=i_HYGZtGQTw
S-Video constantly looking good suggests that this might simply be a particularly bad case of composite artifacts caused by luma and chroma channels interfering with each other. Could you try and check if you can make the shimmering effect appear with S-Video, please? That should allow us to make a more educated guess at what might be going on.