Bitrate of TG4 video is about 24Mbps, vs the earlier TG2 series which have about 14Mbps. Neither are what I'd consider very good codecs, but the TG4 does have a visible improvement in color and maybe even DR.
I agree resolution is far from real 1080, if I had to guess I would say there's about 650 - 700 lines of resolution. Macroblocking can also be bad especially in a complex scene which happens often, this is waterproof after all so lots of water scenes.
But there isn't a better video option unless you plan to invest into waterproof housing for a better dedicated camera. Perhaps Gopro or something similar may be OK if you don't mind the extreme fisheye.
All these small cameras have small sensors and worse, crappy video algorithms.