I am not sure where you got the script you posted. It doesn't look like anything that came from the VideoFred scripts for improving film. Most of the degraining portion of the script looks like it came from the script used to recover the original frames from a "botched" transfer, which is something I assume you already did. That is the wrong code to use for the video you posted.
I ran your video through both VideoFred's script and also my heavily modified version of his script and both worked as expected and produced a good result.
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