If I’m not wrong the central part is an image generated for the 10” tablet resolution ( image is sharp ) and resized for the phone different resolution ( image not sharp and stretched ).
If you can’t regenerate the image for the phone native resolution, try a different resizing algorithm
So the problem is the background image I used for the layout?
"If you can't regenerate the image for the phone's native resolution, try a different resizing algorithm"...
If you want to resize an image and use it as background, do this operation in a proper photo editing software ( the scalepicturetofit or similar option in app inventor does not guarantee the best result ).
Image resizing is a compromise so check different options of the software you choose ( for example the cubic interpolation in gimp )