Hi! R_OpenLib dev here. maybe i can clear some things up
first of all, oversampling is awesome, but it's no magic bullet you can fire at everything and expect it to make it better. oversampling extends the frequency range a processor can operate within. VM is fixed at 48kHz internal sampling rate. which means that frequency content above 24kHz will reflect back into the spectrum "as aliasing". by oversampling two-fold you increase the sampling rate to 96kHz and the nyquist frequency to 48kHz. this gives you the opportunity to remove the frequencies that would reflect back at your regular sampling rate before downsampling. of course this only helps if your processing adds frequency content that can extend above the nyquist frequency. a prime example here would be anything non-linear. a delay however is a perfectly linear process. given the output you can compute the input. so oversampling wouldn't really be needed in that case.
interpolated delay lines have a built-in filter. linear interpolation will introduce some high-frequency roll-off due to the interpolation. in theory you could use oversampling to combat this, but that'd be a bit over the top imo. if you have a saturating delay, oversampling makes sense again. but in this case you'd want to oversample the saturation only to save cpu.
i don't know what you have done and how you have implemented the oversampled delay, so i can't really say why you experience such a strong coloration. i have designed the OS filters to be steep so that you can push them more towards nyquist and have more of the relevant audible spectrum. from the top of my head here are some common pitfalls that might lead to wrongful filtering:
1) samplerate is not set correctly for the oversampling processor
the oversampler needs to be initialized to the correct samplerate so that it can setup the filters accordingly. if you e.g. set it to half the actual samplerate it will cut the spectrum at a quarter of the target samplerate instead of nyquist leading to a severe drop in high frequency content.
2) processor that is oversampled is not adjusted to the changed samplerate
processor that are influenced by the samplerate need to adjust to a change in samplerate. e.g. if you oversample a filter you need to calculate its coefficients based on the oversampled samplerate instead of the base samplerate. a delay has its time directly linked to the samplerate. here you need to make sure to account for that so that the timing is correct and that enough samples are added to and read from the delay buffer. to set up an oversampled delay you would have to upsample the input, then process the delay x times for the given oversampling factor (e.g. 2 times for 2x oversampling), and then downsample the result. of course the delay now needs to process more values per sample and must therefore account for that when calculating its timing.
3) samples are not processed multiple times according to the oversampling factor.
this one is an easy miss. when oversampling, your processing needs to be done mutliple times for the given oversampling factor. you need to process all upsampled samples and downsample all processed samples. e.g. with 2x oversampling the processor must process 2 samples and must therefore be invoked 2 times.
4) IIR filter frequency set too low
while a lower cutoff frequency for the IIR oversampling filter will get rid of more aliased frequencies, it will also cut away more of the high-end. you can try setting the cutoff frequency closer to nyquist (e.g. 22kHz) to get less high-end attenuation at the cost of less efficient aliasing suppression.
there's also been some questionable information in this thread that i want to clarify:
IIR vs FIR.. that's a debate by itself tbh. but what's not debatable is the quality of each. both filter types can produce very steep filters whose cutoff frequencies can be pushed close to nyquist. while you can design an incredibly steep FIR of course, that will add lots of latency and processing cost, which is not really do-able in VM. it mostly boils down to the phase response. IIR filters will always alter the phase. FIR filters can be designed to be linear phase. the tradeoff for the latter is added latency. so.. FIR oversampling is NOT better than IIR oversampling. it just has different tradeoffs. you could implement a steeper IIR filter and get better results, but at the cost of increased cpu usage... i have designed R_OpenLib to be a good tradeoff between quality and performance.
zero-stuffing is not exclusive to FIR oversampling. you need to do that for IIR oversampling as well. basically zero stuffing is needed to "create" the missing information between the samples. i won't go into detail here, just wanted to clear that up.
Oversampling IS filtering. always has been. oversampling only works if you filter out the frequency content above the original nyquist in the oversampled state before downsampling. since oversampling without filtering doesn't make sense you can use the filters for the interpolation as well. an upsampler for instance works by adding the input value alongside some zeros to a filter that's tuned roughly below nyquist. the filter will interpolate the values and remove the offending high frequency content all at once producing oversampled samples at the new samplerate. since oversampling is filtering, there'll always be a slight loss in high frequencies. since VM runs at 48kHz oversampling filters are forced into the "audible" spectrum. setting the cutoff to 20kHz should be sufficient for most tasks and shouldn't really be audible by most humans.
all of that being said, i've added FIR oversampling to R_OpenLib, so you can try everything i've said out for yourself

initially i wanted to keep FIR oversampling as a standout feature for my brand. but.. if you follow my releases you might have noticed that i don't even include it myself anymore. imo linear phase oversampling doesn't make sense in a virtual modular. the latency is just too much of a tradeoff. i'd rather take the slight phase changes at the highest frequencies.
i don't frequent this forum very often, so i miss discussion like this easily. feel free to reach out with further questions. i'll also try to check this thread from time to time.