Oh yes I’ve noticed it. It sucks.
I think the best way to play Naomi & Atomiswave is going to be via Retroarch with the runahead feature which, if you already have a low lag monitor, gets rid of input lag. It really is a groundbreaking feature.
There are already many titles that run great but I’m not sure if runahead is enabled yet for the core.
You could try RA as it may have less input lag than Demul but if you’re expecting full compatibility with the entire Naomi/Atomiswave library, you’re going to be disappointed...