Same, I think i've worked out whats happening, in this case my sg1000 has a mix of images such as these, when LB chooses the smaller image it doesnt blur, my creativision are all the smaller images and none of them blur.
I don't know if this is a bug but a similar thing happened to me, i created a playlist inside a platform category and named it 'All', it just replicated the main All list and delete and edit were greyed out. I used the Tools>Restore Data Back-up to revert to before i'd made the change to get rid of it.
I worked out how to do it! You just copy the xaml file and rename it to whatever your playlist is named, or i guess you could also just rename the original xaml if you only wanted those views for playlists.
I was converting things to CHD a few weeks ago and ran into the same issue with Sega CD, i just tried without RL (as i hadnt before) and yes it works.
Both PS1 and Saturn CHDs work ok through RL.