hmmm… difficult to say..
with an 720p TV ( also with 768 Y-lines ) it cannot be that the scanline look as it should because of the resizing of the overlay image as the HDMI output is set to 720p or if HDMI is set to 1080p, then the TV shelf would resize the image.
Anyway, the scaliness could not look an fact as they should.
The Youtube Video looks good.
Stupid Question, but are you sure your TV is a 720p?
Or maybe the HDMI Output is set to 1080i on the RaspberryPi?
In my last comment I explained what I forgotten but for the green colors.
But at my TV a cannot find any diagonal lines in the image.
The image above looks exactly so as it look on my TV and the image is only a screenshot through Retroarch.
I would imagine that it comes through the resolution of the TV or the resolution settings of the Pi?
Or it’s a similar problem that patrickm have with his vertikal scaliness overlay?