1992 Other Ford Models Low pressure brake performance

I have replaced the master cylinder with a second hand version as the old one was leaking. I bled the master cylinder on the bench and then installed it and bled the wheels.

When I brake hard the brakes work fine, however when rolling to a stop and when the brakes are applied gently the peddle goes half way to the floor and the brakes don't work as well.

There are no leaks in the system. There was some murky brown stuff in the second hand master cylinder, I cleaned out as much as possible prior to installation but there were still some small flakes in there.

The cap states "use only DOT 3 fluid" and I have used DOT 4 fluid - will this contribute to the problem?