Precomp and continoudly rasterize probelm

I found this  YT video. There is a good explanation on  why effects are a bit weird sometimes with CR . It's just a story of ordering.

Thanks for help 

You have the answer already: Import the flag larger and scale it down without CR. It doesn't get any sharper than that. You may want to read the online help on what CR/ CT actually does. It's not a magic tool to keep content "sharp", it has other uses.

https://helpx.adobe.com/after-effects/using/layers.html

Mylenium

It simply looks like your  nicely tuned wave warp on a comp-sized imported layer now goes kapoof because turning on continuous rasterization chenges how effects process the bounding box. This is perfectly normal, in particular with distortion effects that need that info to determine the amount of deformation. You need to exclude the flag from CR. If you need to keep it sharp, import it at a larger size and scale it down, but still without CR.

Mylenium

The cropped screenshot does not tell us anything but. I suspect that you did not move all attributes to the new composition. We need uncropped screenshots showing the modified properties of the problem layer. In your case, this means we need the main comp and the pre-comp with the properties of the flag layer revealed. Press the "u" key twice and share the screenshots, and we will know for sure what I going on.