Tested with other services and get the same resolution
Settings > DVR > Request Best Output Size is on.
By default this will be 1/4 of your screen size. The tooltip on this button will explain more on this. You can switch it off and set an output size you want.
Depending on your machine's specs, your internet connection and the site you are DVR'ing you may get a poor quality recording due to the intensive nature of DVR'ing, adaptive streaming, or the site may simply refused to give you the requested resolution.
I have gone through the advanced settings and have not been able to fix the issue. Currently, when I open the DVR browser and try and record a show from netflix, I am getting a resolution of 1020x590 which seems considerably lower than what I would have hoped for. Logs are attached.