The application switcher gets slower and slower for me as I have more applications open. The highlighting for the mouse position begins to lag with 9 or 10 applications and performance degrades as more applications are opened.
Once there are 15 applications to show, it can take around 1 second to display, and the mouse lag is quite extreme.
This never used to be the case. I think it began with macOS 10.14.
Is there a way I can improve the performance?
I just turned on KM's app switcher, and it works fine for me in KM 9.0.2 on macOS 10.14.6 with 22 applications open (though granted, I'm on a relatively new iMac with plenty of RAM) so I think whatever's going on with your switcher may be local to your system. Does this slowness persist after quitting and relaunching the KM engine? After restarting your Mac?
I've been using the KM App Switcher for about a week now and have not seen any slowness whatsoever. Currently have 9 apps open, running Keyboard Maestro 9.0.2 on macOS 10.14.5 (Mojave).
So, I have to agree with @gglick that most likely it is due to something in your local Mac setup.
If the problem persists after trying @gglick's suggestions, then you might try restarting your Mac in Safe mode , then start the KM Engine and test the App Switcher.
It could be an issue with Launch Services cache. I believe restarting in Safe mode would clear that cache. Alternatively, I believe there are methods for clearing the cache, but I don't know what they are off hand, tho I expect a web search would find them.