Well, two things about this "mosaic effect" that's different between FF V and FF IV:

1. In FF V, the mosaic effect only occurs either when encountering an enemy or in rare occasions when the cinematic wants to show someone daydreaming or reminiscing. In FF IV, it happens also when you move between rooms, move between buildings, etc. That's really annoying because when you are in a town, or in a cave, you have to move through numerous different "areas".

2. In FF V, when you the mosaic effect, it's just less hurting on the eyes for some reason.

Anyways, it's not like it's a serious health issue, it just really annoying physically and mentally.