As a chess enjoyer, love the idea! I think you're right about what you said in the jam notes though, that the 8-bit style makes it difficult to read.
Also I found myself spamming pause to process what just happened: Maybe it would be better if after each person plays their moves/illegal moves you had to pick which illegal move they did OR state that there were no illegal moves. Then maybe add a timer. (I might be armchair developing too much lol).
Still a great idea and I enjoyed it!