The reason for this “pixelation” is the noise reduction algorithm which is probably not used or not good configured on your device. You can try some settings there but the result is then often blurry. (Another thing you should configure for your needs is the algorithm for finding and sharpening edges which can also lead to artificial items in the picture.) I was never happy with these algorithms, so I use the stock app almost never.
I made some links to some older threads we had here in this old post. Perhaps you find some answers there. OK, these threads are two years old and the OpenCamera fork /e/ provides made some steps forward. But to use a GCam port is probably still the best solution. Especially you get an app which works out of the box and you have no need to play for an hour with different light situations, indoor, outdoor, landscape, portraits, macro and all this. FreeDCam seems meanwhile to be dead. You can also download the original OpenCamera app which is always a bit more modern than the stock app.
I had been using https://leos-gsi.de on my FP4 and GCam there, e.g. “GCam ‘MGC_8.4.600_A10_V12’ by ‘BSG’: MGC_8.4.600_A10_V12_snap.apk”
However, depending on the version, I sometimes had major problems, e.g. when recording videos and sometimes the app froze and I had to restart the whole system.
That’s why I stopped trying GCam on my FP5 with /e/OS and only used the installed camera app - on my FP3, on the other hand, I used the original OpenCamera app.