iPhone 12 not taking HDR Photos

I have just bought the iPhone 12 and the HDR is not working with photos, but it works on video. The 'HDR' is showing on screen when taking a photo, but when I review the photo the HDR is not showing on the top left above the image and they are definitely not HDR.

I just upgraded to the latest software (14.2) hoping that would fix it but no. All my photos indoors are lo-res, underexposed and grainy. HDR is just not working.

This was a similar issue with the iPhone X years ago but a software upgrade seemed to fix the issue. Anyone know something I could try to fix it?