Pixelation at start of video

This topic explains how to check if hardware encoding is being used:

Your logs are showing that hardware encoding is being used:

2021-05-26T18:33:55 MCEBuddy.AppWrapper.Handbrake → [18:33:55] + encoder: H.264 (NVEnc)
2021-05-26T18:33:55 MCEBuddy.AppWrapper.Handbrake → [18:33:55] encavcodecInit: H.264 (Nvidia NVENC)

Thanks for uploading the files. I checked your cut MCE GPU.mp4 video file and I don’t see any pixilation. Playing back using VLC 64bit on Windows 10 and it’s clear. I think it’s an issue with your playback codecs. Attaching the screenshot, left is what I’m seeing, right is what you’ve reported:
image