I think that was muck on the sensor. The old camera body is probably full of dust and flaking paint etc. and that's getting the exposed sensor.
[I]"Plus, just how sharp was that output?"[/I]
Not 100% sure what's really going on there but there'd be a lot of stray light bouncing around affecting contrast. Also the images looked out of focus to me, possibly because there isn't a viewfinder good enough to judge focus with.
BTW this has been done before I think by someone down here fitting a Canon DSLR into old ENG cameras the same as this guy is doing. Reason I see to do it is ergonomics and to reuse the lens.