Messing around with it some more, I noticed that this episode did not have an installscript.vdf file in the games directory, while the other episodes did. The file tells Steam to run DXSETUP.exe on first run which presumably installs the necessary DLL's needed for the game to render correctly. Copying the vdf file from episode 5 and editing 2 lines meant steam ran the initial setup like it did with the others, and fixed the rendering issue. The 2 lines that needed to be edited were "hkey_local_machine\\software\\telltale games\\backtothefuture105.exe" to 104 and "savegamefoldername" "Episode 5" to Episode 4.
I only copied the .vdf of episode 3 to the folder of the episode 4. And it ran like a charm! :)
Nothing extracted yet.
Compatibility Report
System Information
I confirm:
Symptoms
Episode 4 (appid 94520) specifically does not render correctly, but the other episodes do.
Comparison images between episode 3 (appid 94510) and episode 4 (appid 94520):
https://imgur.com/a/MvK1Vej
As the camera moves away from characters, they become darker in appearance which also produces noticeable triangular artefacts. Other surfaces e.g. in the initial main menu background also don't render correctly.
Tested on both AMDGPU and Radeon kernel drivers, both produce the same results.
Reproduction
Simply playing the game.