This sounds like it might be an issue we had a long discussion about last year:
The short version is that there is a bug in Kodi (rather than OSMC). If the material is 576i, 576p, 480i, or 480p, and has a 4:3 aspect ratio, and if the device is set to output it at 576p or 480p, then instead of telling the display to use 4:3 mode, Kodi tells it to use 16:9 mode and horizontally downscales the picture.
Most people don’t spot this, because as long as the display is either locked to 16:9 or set to switch aspect ratio dynamically, the eventual picture has the correct aspect ratio - it just loses horizontal resolution from being downscaled and then upscaled again.
I did try starting a thread about it on the Kodi forums, but the Kodi devs simply ignored it, so I doubt it’ll ever be fixed. Just got to remember to switch to “Stretch 16:9”.
(It’s worth checking that the source video actually is 720x576, though - some stuff on Netflix, for example, is actually 720x540; for that, an alternative is to set the output resolution to either 720p/50 or 1080p/50, and set the video display mode to “Original Size”. You then get an unscaled image, but your VP won’t upscale it to full screen. Personally, I prefer to watch SD material at less-than-full-screen upscaling anyway, because I find blowing it up to 65" makes it intolerably soft, even with state of the art upscaling. YMMV.)