After update (SteamOS 3.4.6), it fixed the graphical errors it had. Using latest Proton (7.0-6)

After testing running with different settings. These are the best settings you can get at 40 FPS stable majority of the time.

From top to bottom.
FSR 2: Performance
Texture Quality: Medium (0.25 GB)
Texture Filtering: Medium (Trilinear)
Mesh Quality: Low
Shadow Quality: Low
Shadow Cache: on
Contact Shadow: on
Ambient Occlusion: FidelityFX CACAO
Volumetric Lighting: Min
Particle Lighting Quality: High
Bloom: on (Personal Preference)
Screen Space Reflections: on
Subsurface Scattering: on
Hair Strands: off
Graphic Dismemberment: on
Persistent Corpses: Many
Corpse Physics: High
Diverse Enemy Animation: on
Motion Blur: on (Perosnal Preference)
Rain Quality: High
Terrain: Off
Destructible Environment: Off
Lens Flair: On (Personal Preference)
Lens Distortion: on(+Chromatic Aberration) (Personal Preference)
DoF: on  (Personal Preference)
Resource-Intense Lighting Quality: High
Resource-Intense Effects Quality: High