[Alex KL-1]

I can add some ramblings...
Some processing IC will have less effective bandwidth intentionally for composite inputs, for not interfering with chroma and vice-versa. A simple filtering near the HF range (end range) will smear the signal. Since the mentioned effect not occurs with S-Video for example, this is potentially the culprit.
Unless the opposite occurs; eg. a composite input with more sharpness enhancement, just for making up the composite lesser performance. So, it calls for more HF signal amplitude and can make the effects that vol.2 mentioned in great detail. This is harder when the set uses a simple transistor video output; generally these have too high collector output resistor value (15k being common for a lot of models; better sets have it less than 8k2 and even 4k7) and smears details due to limited slew rate it can resolve.
LATE EDIT: or the sources, with the know difficulties to join the Y to the C signal and smears due to that (some sources are better than others for it).