I've seen or heard of issues where sometimes using regular composite video backgrounds in solid colors for some games can look kind of grainy compared to using true sync like you have it hooked up now. however, this does not happen that much and basically depends on the system and or device you are hooking it up to. so if you put it back to composite and you don't see a difference then no need to go back. However, if you do see a small difference you could always add a small switch to the rear of the system so you can swap between the two.
In my experience with pc engine DUOs most do not require sync and work just fine with regular composite. Duo-Rs on the other hand usually require pure sync from the video chip.
Also when tapping sync directly make sure to use a 220uf or higher value capacitor in line to help hold a steady sync signal. + side to the chip and - side out to the Av jack.