Widget attached to Character shown in world space blurry?

3D UI widgets are subject to the same post-processing that everything else in the scene is, and that includes temporal AA.

Temporal AA is really good at reducing jaggies, but is kind of blurry. As such, your 3D UI will also blur with any movement. You’ll have to turn off temporal AA in project settings>rendering or add the widget to viewport (“paste on screen”). If you go the second route, you can move the widget based on your player’s location (world to screen space, set position in screen space) and skew based on camera angle, but it’s not as easy as just using a 3D widget. Of course, all the other types of AA available are painfully inferior to temporal AA.

I really hope 3D widgets are eventually given the option to be excluded from post-processing.