optodata, many thanks for your reply. Your suggestion to set the interlaced source .ts file to progressive in 'Interlaced/Progressive Settings' fixed the issue ! The output mp4 25p files no longer have any interlaced lines or combing.
Another issue is playing back the output mp4 videos, whether the source .ts file is set to interlaced or progressive in 'Interlaced/Progressive Settings', the motion is slower during playback in PowerDVD like when you get when the fps is at a lower rate but Mediainfo reports fps as 25p in the output mp4 file.
This is the Dropbox link to download the output mp4 file with the interlaced lines and slower motion during playback in PowerDVD or other media player.
https://www.dropbox.com/s/2hvrle245nvvhbf/Produce.mp4?dl=0
PDR17 Trial output .mp4 file
Video
ID : 1
Format : AVC
Format/Info : Advanced Video Codec
Format profile : High@L3.1
Format settings : 2 Ref Frames
Format settings, CABAC : No
Format settings, RefFrames : 2 frames
Format settings, GOP : M=3, N=7
Codec ID : avc1
Codec ID/Info : Advanced Video Coding
Duration : 1 min 43 s
Source duration : 1 min 43 s
Bit rate : 5 379 kb/s
Width : 1 280 pixels
Height : 720 pixels
Display aspect ratio : 16:9
Frame rate mode : Constant
Frame rate : 25.000 FPS
Color space : YUV
Chroma subsampling : 4:2:0
Bit depth : 8 bits
Scan type : Progressive
Bits/(Pixel*Frame) : 0.233
Stream size : 66.2 MiB (93%)
Source stream size : 69.1 MiB (97%)
Language : English
Source .ts file:
Video
ID : 6601 (0x19C9)
Menu ID : 17540 (0x4484)
Format : AVC
Format/Info : Advanced Video Codec
Format profile : High@L4
Format settings : CABAC / 4 Ref Frames
Format settings, CABAC : Yes
Format settings, RefFrames : 4 frames
Codec ID : 27
Duration : 1 min 41 s
Width : 1 920 pixels
Height : 1 080 pixels
Display aspect ratio : 16:9
Frame rate : 25.000 FPS
Standard : Component
Color space : YUV
Chroma subsampling : 4:2:0
Bit depth : 8 bits
Scan type : MBAFF
Scan type, store method : Separated fields
Scan order : Top Field First
Color range : Limited
Color primaries : BT.709
Transfer characteristics : BT.709
Matrix coefficients : BT.709