I have just noticed this… I am using the latest version, but it’s probably been the case forever. Ticking responsive images in theme options, is probably good practice for most websites, but I have just noticed that it also effects backgrounds. Once it goes into mobile mode, it selects a smaller background image which of course is then stretched out and looks pixelated.
I guess this occurs only when “cover” whole background is selected also in the page section.
Not sure if this is a bug… or even fixable. I would say that it could probably be a good idea for you to make it that background images arent effected by the responsive image option?
But for now, my fix was just to turn off responsive images.