I posted about this (much) earlier when 0.63 was first released. However, I believe I have a better way of explaining the issue at this point.

If you run Thexder under DOSBox 0.61 with machine type Tandy. You will see and hear Thexder looking and sounding just as it should.

Take the same game, Thexder, under DOSBox 0.63 with machine type Tandy. You will hear the game as you should, but the display is sort of a Tandy and Composite hybrid. At the opening game/title screen the 'background' graphics are in Tandy 16 color mode. However, when the title "Thexder" scrolls up, you can clearly see the title display as it would for Composite Output - Not Tandy 16 color mode. Press Enter, and in-game graphics are all Composite Output. No graphics in-game are using Tandy 16 color mode - Rather the Composite graphic palatte is displayed. When game returns to title screen, same results. 'Background' graphics are in Tandy 16 color mode, but 'Thexder' title is Composite graphics.

Under a similar vein, one of the first four Ultimas at the title screen (Shows full castle) when run under "Tandy" mode, shows the entire screen with Composite mode graphics.

-Trebor