Blurry 0.5 camera

I just got a new iPhone 16 pro about a week ago, originally I had a camera cover and I could take pics just fine, but eventually I noticed my 0.5 photos getting weird and distorted. I’ve since then taken the cover off, restarted my phone several times, updated iOS, downgraded iOS, but nothing seems to work. I even went to the Genius Bar and when I stepped in, it miraculously started working again for a couple days, and then the pictures retuned to their distorted state. Today I contacted apple support and they said I’d have to get it serviced. Even with AppleCare+ the fees are $130+!!! Has this happened to anyone else?? Why is this happening on a brand new $1400 phone?