You will have to use After Effects for anything DVE related unless you can get by with 1995 aliased edged quality. This is not just liquid. This is EVERY avid product benieth DS Nitris to this very day, man.
Of all the things they worked on over the years (before they stopped working) the bogus aliased DVE just was not one of them, man. This has been their weakest link since the 3D DVE was released with MCv5, at least until the big downgrade a few years ago.
Your work arounds are literally to not rotate a PIP in Avid or to use AE. As an Avid editor, you will get in a habbit of using AE very quickly.
