A BS170 is the same as a 2N7000, a MOSFET but with reversed pinouts. In this application, the MOSFET is not directly in the signal path and should not be injecting any distortion. Here, the MOSFET is acting as a variable resistor to bleed the signal to ground as determined by the waveform generated by the LM741 IC. A MOSFET provides for a larger swing (voltage range) in its transmittance from Drain to Source. A JFET on the other hand has a very narrow swing (voltage range) in its Darin to Source transmittance. So some rather specific changes would need to me made on the LM741 LFO circuit section to address the narrower gate voltage range of a JFET.
Can you better describe the distortion to which you refer?