Yes, that is the quality of the original presentation. If anything it looks worse because it has been converted from film to a digital signal, as well as being stretched to be a bit larger than normal. Lmk if you young whippersnappers have any questions about this, I grew up watching this on VHS back in the dark times 👴
This app live captions any output to your sound device locally https://github.com/abb128/LiveCaptions
Whether I mute my output device, or selectively mute a tab or app it still works fine.
There’s a similar feature baked into Win11, not sure whether that is processed locally/privately though