Ikr, I am a student and bought MacBook Pro M1 2020 model for my classes and tuitions and coding, but I face this problem only at night. In the morning, it has the best quality about 720p. But from evening time, it is like painted or grainy picture, mostly around 360p. I tested this for some days and noticed that this happens only at night.
If this is a software issue, I would kindly request to get it fixed at the earliest since most of us are using the camera during this COVID-19 pandemic for calling relatives and friends and also using it for classes and work.
If this is a hardware issue, please inform me if it is possible to repair it or get this MacBook exchanged.
I hope to get a response at the earliest possible.
Regards