That is unfortunately normal.
When you take a Live Photo, the camera will take a high quality still frame and a video clip with a lesser resoltion.
When you change to a different key frame by selecting a frame of the video clip, it will have a lesser quality.
For example on my iPhone 11 pro Max the high resolution still frame has a resolution (pixel size) of 4032 × 3024 pixels, while the video clip has a resolution of only 1920 × 11440 pixels.
You should not be seeing the difference on an iPhone, however, unless the you are using iCloud Photos and the video component needs downloading from iCloud because of lack of storage and you are only seeing an optimised preview.