Crop a slide create via software simulation

Can you please add the version and the OS you are using? Version number is to be found under Help, About Updates.

There are NO FMR projects: either you have software simulation projects, or Video Demo projects. In Software simulations, Demo mode, you an have some FMR (Full Motion Recording) slides, so I suppose you are talking about such a project? I never use that anymore since Video Demo will deliver a much higher quality result, and it is a passive simulation, so MP4 output is OK.

Before creating a simulation or a video demo, it is very important to do some preparations, one of them is to choose the right size of the project, resolution in px. You tried to downscale a project which was captured in a too high resolution, and this is indeed the result; the highlight boxes will be scaled down as well if you set up the scaling options properly, but they may be misaligned. 

There is no a way out of the box to crop the slides (that is what you should have done when choosing the size), althçugh you could use a graphical application to do so, and crop all the background images which you find in the Library. However that will not solve the problem, because the highlight boxes may still be off set.

If you don't feel up to recapture the project, move all the highlight boxes to the proper location will be the best approach. They have a separate timeline.

Have also a look at:

https://elearning.adobe.com/2019/11/software-simulations-1-preparation/