I have also just had this problem.
Setup an old Pi2 with clean install of 7.11, copied over a few systems, loaded up my first game to try it out, Sanxion tape version on the c64, and when I exited back out, it did exactly as shown in your video.
Just tried Crash Bandicoot on PSX and on exiting game it did the exact same.
Im sure its the front end theme related.
I had made a few changes, to large screen pic, light background and a few other changes and it appeared to lower the resolution - id manually set mine at 720p in the config file.
Going to try and put theme / front end back to normal to see if that fixes it.