Oops, you are right - I did not go that far when trying.
However if youwant it to stretch all across your SU window, why are you choosing the positioned and not the "stretched" option? True however that it may not solve the bad quality problem. Maybe it is even better to only add a watermark that is somewhat similar in size to your SU window? I always work on a window whose working area is exactly 1024x768 and therefore my exports are the same (or I also have a 16:9 aspect ratio window setting, too). So now as I inserted an image I exported the other day at 1024x768, it perfectly fits my window and looks pretty nice (I mean not bad quality and such).
Not as if I was going to work in a crypt however... 😒
Watermark.jpg
(BTW my dialog looks different from yours - how is that?)