Just tried this (checked up to Chris killing the zombie at the start when playing as Jill) and confirmed it is working. I have the "mod_data" folder which contains the "BG" folder and "manifest.txt" file in the same directory as the game exe, as you explained in the Readme. When I start the game, it says it detects the mod and selecting the second option ([DEV] Resident Evil) enables it. I personally renamed the mod within it's "manifest.txt" (changed name and Title value) just to make it less confusing to me when I select it.
From what I can tell, it's a nice little improvement to the backgrounds that fixes the color banding and graininess, but still keeps the low resolution. I saw there were AI upscaled backgrounds somewhere else, but it's subjective as to if they look good or not (personally not a big fan of them).
This does a good job of cleaning up the backgrounds without really changing the look of the game. Will try to post another comment after I do a full playthrough. Here are 2 examples.
Example 1:
old: I.imgur.com
mod: I.imgur.com
Example 2:
old: I.imgur.com
mod: I.imgur.com
refat17
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