I see you went with a GIF solution. This seems like a major flaw in the video background support from squarespace.
Vimeo defaults to "auto resolution" which seems to be the problem (especially with non-standard video sizes). Vimeo supports supports ability to specify resolution in embedded videos but since squarespace doesn't use the embed code format for background videos, the feature is not supported.
Raw background video iframe
<iframe id="vimeoplayer" src="//player.vimeo.com/video/376011636?api=1&background=1" class="background-video ready" style="width: 2225.09px; h