Pretty good thread on the topic here: https://shmups.system11.org/viewtopic.php?f=6&t=61746&hilit=dither
If your PS2 will run backups, you can use crazymanzor’s de-dither patch utility to patch out the dithering effect. I believe the consensus is that most games benefit visually, although there have been documented instances where, as nmalinski said, the result is undesirable. There’s some good screenshots in that thread as well (yes, I’m shamelessly plugging some of my own contributions). Worst case scenario, you can try it out and if you don’t like it compared to unpatched, then go back to the original disk.