In addition to the software bug, they also used a dated camera module from the front-facing camera on the iPhone 11. They could have used the higher quality rear-facing camera from the iPhone 13, or the front-facing camera part from the iPhone 13, or even (god forbid) a single rear-facing camera part from the iPhone 13 / Pro for the best quality. The iPhone 13 Pro contains 3 of these rear-facing cameras with far better quality, and 1 front-facing camera that also has far better quality.
Absolute best case scenario, they are able to fix software issues and bring the camera quality to be equivalent to the front-facing iPhone 11 camera. But why stuff an outdated camera part into a brand new $1600 display 2 years after COVID made us all spend so much of our days on video calls? It seems not just short-sighted but downright hostile toward customers as this one points out.
Edit: Found in the comments a claim it’s a software bug.