KornSivan: According to @ TheOtherGuy66 and @ Dekakst, this issue can be temporarily resolved by installing The Classic Rebirth DLL for Resident Evil 1 and dgvoodoo.
Note: There are still some graphics errors and issues, but it can allow you to play this game.

RJzTYRANTz: Would you have the configuration for dgvoodoo?

RJzTYRANTz: Would you have the configuration for dgvoodoo?

TheOtherGuy66: Google Resident Evil Seamless HD join there discord, the amd fix is easy to find there.

KornSivan: Here is fix,form Resident Evil - Seamless HD Project.

if anyone else is willing to try, here are the steps to reproduce what i just did:
1 - Install the game and the SHDP mod as instructed by the SHDP team
2 - Get dgVoodoo2
3 - from the dgVoodoo2 archive extract the following files:
dgvoodoo.conf
MS/x86/DDraw.dll
MS/x86/DD3DImm.dll

4 - rename DDraw.dll to re_ddraw.dll, and move all of the files you extracted to the root of the game folder where Biohazard.exe is located
5 - open dgvooodoo.conf in notepad, scroll down past the [DirectX] section, change VideoCard = internal3D to VideoCard = ati_radeon_8500 and VRAM = 256 to VRAM = 4GB. To remove the dgVoodoo watermark from your game, change dgVoodooWatermark = true to dgVoodooWatermark = false.
6 - save the file and run the game

AlanMay: Do controllers still work if you do this?