Yes, as soon as you go below 1280 pixels width at maximum frame rate for your resolution, there is a drop in quality, as the sensor is configured for a mode that supports down to 640 pixels width. For best quality, run full horizontal resolution and crop your video in post, or alternately, set the resolution to any lower resolution you want, but reduce the frame rate to the value you would get if you were to set 1280 pixels horizontal.
For example, if you want 1024x720 at maximum quality, set the camera to 1280x720, observe the maximum frame rate (1502), set the camera to 1024x720 and set the frame rate to 1502 or lower.
This limitation will be fixed in a future software update, there is a way to configure the sensor optimally for any selected resolution but we need time to implement this change.