why does the output of a sql query display incorrectly when using a custom function in the select statement?

That’s just a SQLPlus / SQLDeveloper script display issue.

You can manually set the width of the column with the column ... format command:

column description format a50

select dtstage, status_desc_sf(idstage) description
from bb_basketstatus
where idbasket = 4;

It might also be useful to increase the default width of the lines (which defaults to 80), eg:

set linesize 120