Quoted from PanzerKraken:

Sanitarium mode is the worst also because it's on the screen for so long often, just seeing the same two animations and terrible looking art repeating.
Some of the pumpkin mode visuals are also kind of rough, like the couch stabbing scene one, where you got this goofy looking out of scale Myers just weaving back and forth. Theres decent art and some fine animations in it but it's just inconsistent and that needs smoothing out.
As others mentioned too, the movie clips are oddly not consistent either, some seem to play at low resolution or have macro blocking present at start of clips, while some clips play and look fine.
The transitioning of modes and clips also is awkward at times, stuff cutting off things in weird spots. The whole presentation feels like it can use some tweaking

Quoted from Rdoyle1978:

I'm guessing it has something to do with the looping required in those scenes while the mode is playing. The film footage would be next to impossible to loop like that without it being distracting. But I agree, the animated art is pretty jarring. Especially since the playfield and cab art is SO nice.