To Gordon and others,
I have been noticing this problem for years. My workaround has been simply to render everything BUT the speed changes, set my Edit to Tape preference to Preview Quality (not Full, which forces a render), and Edit to Tape with the speed changes left in Green Preview mode.
Ridiculous, but at least it looks better.
Another option (that only works with certain kinds of footage) is to disable Frame Blending. This is usually the first thing I try, but again, it may substitute softness for steppy motion. It really depends on what the footage is, and what the playback speed you are changing to is. It CAN work, depending on the situation.
Lastly, I am not a Motion user, but for complicated speed changes, like Reverses (which FCP simply CANNOT do with any acceptable degree of quality), I export the clip to After Effects, which has no issue at all with doing clean reverses or speed changes. If Motion works for you, God Bless…
I already know After Effects, I already have After Effects, and my belief is if FCP can’t do it, I don’t trust it to another Apple product.
I should say that I have demonstrated this (and several other very odd, and much more disturbing render bugs) to Apple representatives, and have not gotten a satisfactory reply, ie a viable fix.
The workarounds are my own, or stuff I have picked up from valuable community boards like this one.
At the moment, I am really struggling with buggy renders that are far worse than this one, but I feel your pain. It makes no sense that rendering a clip should make it look WORSE.