You're absolutely right for the two facts -)
Composite video is what it's name suppose : a mixing of Red Green Blue and Composite Synchro signals, PAL or NTSC or SECAM encoded, with all the degradations to the sharpness, résolution and colors purity that's include :-(
Result is a poor quality signal just good enough for VHS recording ;
OTOH RVB video is the BEST signal you can get and must be used whenever possible :-D
Amigalement,
Jean-François Bachelet.