When paint with stencil decal gets bad quality

ontherunx0

Project file: https://drive.google.com/file/d/1rTUNSnVF9PQBWY5hM-CtUE2BVfCy1WXp/view?usp=sharing
Textures: https://drive.google.com/drive/folders/12TesRIClLJIZXKfPR-qHR_8AdhQNv5SI?usp=drive_link

P.S I tried to upscale the decal but it didnt help

gnoop

Looks like your UV islands  are  pretty loosely packed .  Modern UV packers could do much better usually .  It could give you more pixels per certain detail.   Then  you can bend /deform other islands slightly for tighter  pack , just slightly.  Then you could upscale the island  having this sign  a bit.    It may sound like blasphemy and against everything you read about "steady texel density "  but  sometimes bending the rules a bit helps.    Nobody notice different texel size on just white thing .    You also could make sure the island having  this sign is not deformed or rotated . Rotate others instead .    It's a case of no perfect solution  , you just sacrifice  something  else.

Also be sure you work in doubled resolution  in Painter and downscale at export . Painter is notorious for being a bit blurry  because all those projections it uses   operate not within per pixel precision   like Photoshop and such.   

I also sometimes use Affinity Photo with Lamczos3 non-separable  pixel interpolation for that down-scaling .  Maybe it's just self persuading and an  illusion  but I think it gives a tiny bit better look.  Worth a try if you have it   but  it's like 5%  , other 95 is unwrap for more pixels  and straighter  orientation .