Hey JasonW,
I looped in a couple more developers to help explain why this issue is occurring. World renders to a render target, which is then rendered in the world, suffering all post process effects there in. Screen uses the slate renderer directly, and draws on top of the frame buffer, suffering no ill effects of post processing, resolution scaling…etc.
The loss of quality comes from texture sampling (not pixel accurate) artifacts and a number of rendering effects such as post process which aren’t really suited towards UI. When you make it screenspace all you are doing is rendering UI like normal except just updating each frame where it should be located in 2d. Screenspace circumvents all 3D scene rendering. We will not be able to get around texture sampling artifacts. It is what happens when you are in 3D. 3D UI art has to be created in such a way that makes these issues less visible. We have plans to work around post process by rendering 3D widgets after. However, if you want true in world with depth testing there is no way to prevent applying post processing to these widgets.
I hope this clarified your issue and you have a better understanding of Screen Space and World Space rendering. Let me know if you need additional assistance or have any other questions.
Cheers,