Mystical Ninja Starring Goemon outputting 480i only?

This is a bit of a weird one which I hope someone can shed more light on.

So I booted up Mystical Ninja Starring Goemon, the first of two N64 Goemon games from Konami Osaka. And something quickly struck me as odd - everything had this upscaled, almost pixelated appearance to it. Exactly what I hoped I’d seen the back of with my new CRT.

Then it became immediately obvious that the game wasn’t outputting 240p despite the graphics, HUD, and everything rendering at what looks to be 320 x 240 - instead the game outputs 480i!

And I can’t imagine why Konami chose to do this, because it makes everything look blurry and upscaled.

Does anyone know more about this? No one else seems to be mentioning it online.