OK, based on your screen pic and making allowance for distortion in reporting here and it was taken with an external camera, it looks like your screen background pic is Big Sur/Night, with its White/Black menu bar instead of my default black/white, and your Dock icons look normal. I think this is going to be a Settings issue. However I can't find all the settings I wanted to check and try to reproduce your problem (you can't say Apple doesn't give us all the controls, and I'm still learning where all the toys are hidden on my MacBook Air/M1)
Suggestions:
Go into your Photos and check how some known pictures appear in Preview. If they look good your hardware is working OK so settings for the screen background wallpaper becomes a stronger suspect.
Do pictures in web pages (or videos, or loads of other external sources) look correct? In other words, is it only your desktop wallpaper looks wrong?
Get a screen capture (Command+Shift+3) then view the screenshot on a different device (?iCloud share to your iPhone? or email it to yourself?). If it looks right the system is generating the correct image but your screen (the display part) is adjusting the image. Whether that is settings or a hardware defect remains to be seen, but this really has the feel of Settings.
Places I found in Preferences where you could have accidentally tweaked a setting include General (dark mode?), Display (try a different picture?) and Accessibility (careful, there are shortcuts for some of the Accessibility items).