Automobilista 2 V1.6.9 RELEASED - Now Updated to V1.6.9.2

I've not noticed the head movement causes TAA to break, so loaded into RA with my normal settings and I see nothing of what you mention. If anything head movement creates motion blur, like my screens cant keep up, very minor but like TAA blur is exaggerated with fast head movement. But really the image is smooth and clear with only minor motion blur.
This is 100% resolution scale in Pi Play (so 5100x4300 per eye) with TAA on with sharpening at 150 @90Hz.
AMS2 is looking better than ever atm. I wonder if it's a Q3 issue? Does this issue go away if using other AA solutions?

 

Perhaps it's due to the foveated rendering setting?

 

But my Quest 3 has no foveated rendering
Two other ideas: I cropped my VR image in the Virtual Desktop settings to 90% vertical an 60% horizontal. This could cause issues with TAA I guess.
And: I set the display resolution in AMS2 settings to 720p (since it does not effect the resolution of the VR image, only the 2D mirror). BUT I noticed that some textures (clouds, dirt, damage) are very low-res even with all other settings (particles, cars, track) on high. Even the UI has some visual glitches with this low display resolution so I will try to crank it back up.

Side note: Tested the blue-flag-AI in a multiclass race yesterday and it was an amazing experience. I often forget that I am in an offline race. Thank you Reiza for the never ending supply of adrenaline and
endorphine.

 

The OpenXR Toolkit also supports foveated rendering on the Q3.

I have a similar setup to yours: Q3, VD, Open Composite, OpenXR Toolkit, cropped to 50/89, VDXR, H.264+, 500 Mbps, 90 Hz, passthrough for mixed reality, even slight foveated rendering, VD video buffer off, VD SSA off, VD Snapdragon SS off, Ethernet cable instead of Wi-Fi, VD pre-sharpening set to 80%. In-game, TAA sharpness is set to 200. Driver settings are standard except for High Performance.

But I haven't noticed any such errors with TAA.