When I use Optifine/Optifabric with Xaero's minimap on a server the skins are blurred. I do not know if this is a compatibility issue with Xaero's minimap or Optifine/Optifabric so I'll post this on both mods issue trackers. (Minecraft version 1.17)

What it looks like with both mods:

What it looks like without Xaeros mods:

Xaero's minimap issue tracker: https://www.curseforge.com/minecraft/mc-mods/xaeros-minimap/issues/437

This is apparently fixed in v21.12.2 of Xaero's Minimap