I asked for the DirectX Update for a reason. DirectX is not like other games. programs or tools. Being up to date does not necessarily mean that every DirectX component that a game might need is installed. The version number also doesn't reflect this. DirectX is a collection of libraries and components that provides features that can be used by programmers instead of needing to address the hardware (respectivly its drivers) directly.
Since the hardware became more capable over the years more features were added. But they weren't added to updated libraries and components that provides all features from the very first DirectX version. Instead over the time new libraries and components were added. So libraries and components from different DirectX versions coexist. From Windows Vista onwards Windows came only with the libraries and components for the newest DirectX versions (10 and up).
Some older games therefore require libraries and components from older DirectX versions that are missing on a system with a freshly installed Windows Vista, 7, 8, 10. The last DirectX Update adds these missing libraries and components of older DirectX versions. Some people fear that this old DirectX Update will downgrade their DirectX since it's sometimes called a DirectX 9.0c Update. But that only means that libraries and components up to DirectX 9.0c are added. The already present libraries and components of newer DirectX versions aren't overwritten. They continue to coexist.
The reason I tell you this is that some time ago I wanted to play Black Mirror 1 in a window. I used a tool called D3DWindower (sadly only works with 32bit Windows) to achieve this. In the options of this tool I had to activate the usage of certain DirectX 7/8 feature. Otherwise I got artifacts like the one you're talking about.
That doesn't mean that it's also the cause in your case. But it might be possible. You can download the last DirectX Update (June 2010 because DirectX 9.0c development stopped back then) here:
Link If you doubleclick at the downloaded file it will only extract itself into a folder you have to chose. You then need to go to the folder and doubleclick on the dxsetup.exe to start the real installation.
You also haven't answered the following questions:
Does the video chip (GPU) or the display device (monitor, TV, beamer) handling the scaling of the game resolution?
Do you use DPI scaling to make objects of your desktop bigger?
If so - have you already tried to disable display scaling on high DPI settings for the agds.exe and BMirror.exe?