Mouser I am embarrassed by how long it has taken me to follow up on this. Should have done it a long time ago.
After some study, I think I figured out that it is not SC's problem. The problem is that unlike say, a word processor, that allows you to change the background color of some text, the text I work with is not as well defined. I use it for highlighting things in articles captured from online. For whatever technical reason, maybe the difference between the word processor producing text that is rendered differently then screenshot captured text, the text I am using the highlighting on has different properties. Maybe that means it is not as "dense" or something like that. I mean dense in a figurative way not necessarily a technical way. So sometimes, when highlighted, it isn't as stark a contrast between the highlight and the background color, or the text doesn't show through as clearly as say compared to that word processor text that seems to be both clear and strongly contrasted.
So I don't think this is SC's fault. It's just the nature of the differently rendered text.
However, I do notice that sometimes, when I flatten screenshots that contain text, the text (which looked fine before flattening becomes fuzzy looking. So apparently it is distorting somehow when flattened. I think the entire screenshot is becoming fuzzy, but it is most notable on the text parts. This is not a closely related problem although both do effect the readability of captured text.
Not easy to provide a sample since it involves screenshots which I don't think can capture this. But I'll see if I can think of another way to describe how to reproduce it.
Anyway... the problem described in this thread are NOT the fault of SC. I wanted to make that clear. I have been able to get it to work pretty well most times except for certain kinds of fonts which tend to blur more than others and maybe aren't as dark and dense looking. But most of the time I can tweak things to look quite good.