The telesnap recon suffers from a shockingly low bitrate. (Probably the only way to cram it in on the same disc.) Nearly every fade out/fade in, or dissolve pixilates very badly.
I know this is a really old post, but I think the telesnap recon is simply low bitrate because it came from an MP3 CD recon from a bunch of years back. It was the equivalent of a quicktime/realmedia thing in the early 2000s.
I’m a bit confused as to which release you got? On the NTSC version, the color copy is on disc 1. The Blu-ray is actually region free as far as I can tell (the included DVDs are not). Plays fine on my US PS4 (and probably any machine that will do 25P?). Even on that case, where there’s plenty of room on the BD50 for the SD recon on disc 2, and it’s still pixelated, as it was back on the audio CD.
The initial PAL DVD came out before the color animation was completed, and R2 territory never got a second 2-disc DVD release.
Then, the US and Australian DVDs came out. These had the black and white version crammed in with all of the extras on disc 2. The jaggies are insanely bad and almost unwatchable. The color version is a bit messed up. The credit fades are based on earlier renders. Sometimes the text jumps around, or the fade is actually missing. In one episode, there are early Dalek renders shown, which are left-handed (mirrored).
Then the Blu-ray came out. It has 2x BD50s + 2x DVDs. BD disc 1 has B&W plus most extras. BD disc 2 has Color and the recon. This is the only way to get the R2 color DVD. However, only the main B&W and Color features are on these discs, not any extras. It’s worth picking up. At 1080p, you can see a pretty nice fake grain effect on the B&W version, which gives it a bit of a vintage look, and all the line work is much smoother.