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I would say play without DLSS if you're at 1080p, because it can only work with the internal resolution it has to work with, and the higher your display resolution the better (similarly to how frame generation only really provides a smooth benefit if you're already at 60 fps.) But in a game this intensive on a 4060, as you found, playing without DLSS enabled is probably not practical consistently, so you may just be stuck with some level of upscaling artifacts. That said, using the updated DLSS implementation will probably result in some improvement.
Edit: That guide was removed due to a false DCMA takedown, so I'll link the author's Steam thread with the same recommendations instead: https://steamcommunity.com/app/2124490/discussions/0/4849904828209657104/
same thing for me, I also have an RTX 4060
4k graphics performace dlss mode the hair becomes super pixelated (you can't even see the faces haha)
when I set the quality 2k 60 fps dlss the problem decreased a lot! it is still noticeable in the video scenes but not much, it is still annoying
It's not worth playing at 30 fps, keep in mind that it has a DLSS version 3.5, I updated it to 3.7 manually
HUB has already proved that DLSS can look better than native in majority of games.
https://youtu.be/O5B_dqi_Syc?t=1
I’m on a 3080 and set it to 1080p dlss on quality now, and it looks fine now.
FYI DLSS ver. 3.8.1 Quality preset E and Frame Generation are on in game
UPD: above solution also fixes pixelated flickering around objects and especially characters hair for Nvidia's Ray Reconstruction current implementation,which now allows to have better reflections without visual bugs