Per Game Settings and Overall Performance: Lock to 30 or 40FPS, my preference is 40, use 30 if on the go. The game should run at a solid 30fps with these settings should you choose to cap to 30, but there is enough overhead for 40 for most of the game. Manual GPU clock can be set to 1600 for a slight performance gain, but I find it unnecessary. Frame rate drops below 30FPS will still occur when aiming down a scope in some areas. This is due to the game essentially rendering the scene a second time from what I understand.

Screen Resolution: 1280 x 800

Refresh Rate: at your discretion, I play it with default 90Hz

Frame Rate: Variable

Display Mode: Full Screen

V-Sync- On

Cinematics Resolution: Full HD

Ray Tracing: Off, obviously

FSR 1 and 2: OFF - I find FSR to be a blurry mess on the Steam Deck. When you have it on you're essentially running the game in low resolution that is pretending to be your set resolution. The loss in detail can be huge when you're already playing at a resolution as low as 720/800p. If you are adamant on using this, you will probably need to use at least Balanced.

Image Quality: 100%

Rendering Mode: Interlaced - Extremely important to have this setting for good performance. It is a lower image quality from Normal, but the resolution does not look lower. It has a sharper quality than FSR.

Anti-Aliasing: Have this on at least TAA if you don't want the game to look like pixelated garbage. FXAA+TAA I find unnecessary.

Texture Quality: I recommend no higher than Medium (0.5 GB).

Texture Filtering: ANISO x2 - Anisotropic filtering can be expensive but having it at least on x2 can improve image quality significantly from not having it at all.

Mesh Quality: Mid - This setting can be demanding but don't set it to low or else some sections of the game will look like they were made for the PS1

Shadow Quality: Mid - Keep this setting off of low. Low causes the shadows to artifact heavily and will make your eyes bleed.

Shadow Cache: On

Contact Shadows: Off

Ambient Occlusion: Off

You may try using Contact Shadows and Ambient Occlusion, but I found that the game looks fine without them and having them off helps to keep the frame rate over 30 in some sections.

Volumetric Lighting: Low - Don't turn this off or you'll kill the look of the game in some areas. There is a Min setting you can use, but Low looks better and doesn't cost a lot of extra resources.

Particle Lighting: I have not tested this particular setting, you may be able to leave it on High but from the image Capcom provides I doubt it is worth it. I set it to low.

Bloom: On

Screen Space Reflections: I have not done a full playthrough with this setting on but in the demanding areas I have tested it doesn't hurt to have on. If you run into issues in areas with lots of reflections, turn this off.

Subsurface Scattering: On - Game can look very bad without it.

Hair Strands: Off

Graphic Dismemberment: On - It's a horror game, let's not turn down the gore.

Persistent Corpses: Few - you might be able to leave this on Many but it will take up resources and I think it is not necessary

Corpse Physics: High - The game looks goofy as hell with this turned to low. I haven't found any performance issues leaving this on High

Diverse Enemy Animations: On

Motion Blur: Entirely your preference. I have played the game with both. No performance difference.

Rain Quality: If you like being able to see the rain at all, leave this on High. I did not notice any performance issues during the rainy sections.

Terrain: Off - I would love to tell you that you could keep this on, but it is costly. Have it off. The game still looks fine.

Destructible Environments: On - You would be missing out with this off.

Lens Flare: Your preference. I have it on.

Lens Distortions: Once again, your preference.

Depth of Field: On

Resource-Intense Lighting Quality: I have not tested the entire game with this on, but the sections I have played with it work fine. It does improve the look of the game a lot in my opinion. If you are dipping below 30FPS in normal gameplay though, I would try turning this one down first.

Resource-Intense Effects Quality: I haven't noticed much difference either way. To be safe, I have it set to low.