Hey, just an update in case you are still launching from the terminal. You can create a Shortcut with newer macOS versions that you can pin to your dock just like any normal app. I've done this using your terminal command and it launches without the terminal window and zero typing required! Besides other glitches that I'm still dealing with, this workaround does solve the terminal launching and blurriness issues!
For anyone who might be wanting to do this:
1. Open the Shortcuts app on macOS
2. Create a new shortcut using the + icon
3. In the search bar on the right, look up "Run Shell Script" and add it to the shortcut
4. For the shell script, type the path of your PyxelEdit app in and add " -AppleMagnifiedMode NO" to the end
(It will look similar to the command below from OP)
/Applications/PyxelEdit.app/Contents/MacOS/PyxelEdit -AppleMagnifiedMode NO
5. Exit the window and right click on the new shortcut to name it whatever you want, change the color and the icon, and add it to your dock!