I probably made a bad word choice to say pixelated, probably interpolation/aliasing instead, either way, it degrades the way it looks.
I don't think it is terrible, the main issue I see is making it harder to read the text in Kontakt.
Enlarging like this and potential artifacts sort of comes with the territory. Have you tried zooming by an evenly divisible amount? For example going from 100% to 125%. That might make it a tiny bit better.