I became interested in Pentax's Pixel Shift Resolution mode based on srs77's favorable results with the K1. I was less interested in FF, so started looking at the K3-II, which has the same Pixel Shift mode. The K3-II has smaller pixel pitch (3.9um vs 4.9um of the K1) but otherwise are similar, except of course the K3-II is 24MP APS-C while K1 is 36MP FF.
srs77's images were taken around 0.5:1 at f8, so are slightly diffraction-compromised. I wanted to test the K3-II such that the camera was the limiting factor, not the lens, so my first images were taken at M=0.7 and f3.3.
My subject was the 1949-S
Lincoln Cent that I'm using for my 80mm shootout. Critical focus was on Lincoln's throat near the center of the image. I did 3 shots: #1 with my Canon T2i as a reference; #2 with the K3-II in non-PS mode; and #3 with the K3-II in PS mode. See the cropped images below:
T2i (reference)

K3-II no Pixel Shift

K3-II with Pixel Shift

To me, the non-PS image looks over-sharpened , and the PS image looks even more over-sharpened and very noisy. Shadow contrast has been reduced, and the noise level is so high that it is actually losing resolution.
I also tested the K3-II at 10x magnification on the same coin, zoomed-in to the date and mintmark area. I took 100% crops at the bottom left corner of the "4" of the the date. Here are the T2i and both K3-II crops:
T2i (reference)

K3-II no Pixel Shift

K3-II with Pixel Shift

The setup is stable and shows no vibration in Live View, so any movement is caused by the camera. The T2i has EFSC in Live View, but the K3-II does not and shows significant shutter shake blurring in the no Pixel Shift mode. The K3-II does have EFSC in Pixel Shift mode, so the shutter shake is gone, but it appears the Pixel Shift operation creates significant artifacts. Maybe the sensor movement causes a little vibration, as I can see both horizontal and vertical artifacts in the image.
So, do I have a bad K3-II? Or is this technology just not suitable for photomacrography? Are there improvements that went into the K1 that were not present in the K3-II?