Hi
Tried this out with a large image 4480 x 2520 and cropped this to 2695 (W) x 2804 (H) to match your starting panorama. This is the original after cropping.. (jpg)

This image was placed in the timeline and zoomed (16:9) with keyframes to produce a pan across the frame in 10 seconds.

This is the VP screen viewed in preview set at 1920 x 1080. This still looks pretty sharp to me.

Here's an VLC output image from the video
Parameters to create the video :
mp4, 1920x1080 - Youtube 1080p
MP4 Encoding setup : H264, quality 10 This is the only setting differing from yours. You set yours at 20

This, IMHO is not a bad result. The video pans from side to side of the full frame in 10 seconds.
A VLC screen copy of a video exported at a quality setting of 20 shows very little difference.....

So little in fact that they have to be placed side by side to see the difference....

I can't see why your VLC output is so much worse than your original image.
Nat