For some reason the text looks okay when the game window is at 10:9 aspect ratio. To recreate it, can you tell me what your window size is?
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I tested it and it looks better at higher 10:9 ratio (320x288, 480x432, 640x576, etc.). 160x144 is the one where the text looks the worst
If you put the scale to 1x, this is how small 160x144 is.
This is 320x288. If you keep going up, it gets more and more clearer.
This is 480x432.
You can put the game window size at 160x144 but it's just too small to see and you're better off increasing it to at least 480x432, as long as you keep to the 160x144 resolution.