The render quality settings apply mostly to 3d games. Very few of the features you would usually use in a 2d game are affected by them.
It seems like your play-window uses a different resolution than your device. Click on "16:9" in the upper left corner of the play window, and set it to a custom resolution which is identical to your target device. You should now see the same degration due to scaling which you see on the device and then should be able to troubleshoot it properly.
Regarding why there is that degration: There are a couple of possible reasons. But which one is responsible in your specific case is hard to tell without seeing how you set up your camera, how you render your sprites, etc.
But keep in mind that it wouldn't be wise to look for a solution which looks good on that particular resolution but not on any others, because Android devices come in all kinds of screen resolutions. To keep the image quality ideal you should try to always keep the scaling 1:1 no matter what resolution you have. But that means the amount of game world which is visible on the screen depends on the screen resolution, so different devices will have different game experiences. There is no silver bullet solution to this conundrum. You will have to find a game-specific compromise.