To fix this, for Steam Deck
Go into desktop mode, then rename this folder in the install directory:

Tempest 4000\Win7-8\Assets\Sounds\Tracks_xwma
to
Tempest 4000\Win7-8\Assets\Sounds\Tracks_xwma-old

to remove the buggy video
Tempest 4000\Win7-8\Assets
and change ATARI.mp4 to ATARI-old.mp4

This will force the game to use ADPCM music tracks, which will work fine. You should use the standard (not Windows 10) version when launching. Game seems to run perfectly after this change.