Hello! You should turn on gl_drawable_resolution to fix this - it's an argument you can pass to the outline_transform transform via drawable_res=True.
47 days ago(+1)
You need to use mesh padding or increase the transparency around your image to accommodate the outlines, yes. Mesh padding will change the size of the image, so I recommend padding the image with transparency outside of the engine.
You'll always have at least a small quality change when resizing images in Ren'Py also, which isn't under my control/it will look like that regardless of the outline being applied if you've toggled the drawable resolution property on.