Why a 256px ICO can still look blurry
A sharp preview does not guarantee a sharp desktop icon. Diagnose the artwork, the sizes inside the file and the place where it is displayed separately.
Start at the size people actually see
Inspect your design at 16×16 and 32×32, without zooming. A full company name, a fine outline or a photograph can become unreadable here. Try a single initial or a simpler silhouette. Enlarging a small source does not recover missing detail.
Pack more than one size
An ICO can contain several images. For a Windows-oriented export, select 16, 24, 32, 48 and 256px; add 64 and 128px if useful. In IcoJet, 24px is available but not selected by default. Every size is generated from your one source: the tool does not redraw small details by hand.
Check the destination, not just the preview
Export a square PNG of at least 256×256, convert it, then inspect the result in the actual shortcut or application. If it is sharp at 256px but muddy at 16px, simplify the artwork. If a different picture appears, verify which file the shortcut references before converting again. An MSIX app may also need separate PNG assets; an ICO alone is not a complete app asset set.