Can bad internet affect graphics?

[zinc smelt]

Like pixelation or blurry image

[night ruin]

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[subtle bear]

If you're playing via cloud streaming, yes of course.
If the game you're playing is running locally on your Xbox console or on PC, then no, the graphics will remain the same regardless of your Internet connection.

[zinc smelt]

Im playing on xss and fornite looks terrible

Its blurry pixelated

Grainy

[subtle bear]

The game will not look as good as on a high-end PC or on Series X, that's for sure

But you can still change some settings I believe.
Make sure the game is not running in 120 FPS mode, that will help make it look better