Orange/red dot, phone hacked

I have noticed this tiny pin head of a dot appears above the bars that show the strength of your wifi connection. Sometimes it is orange, sometimes it is red and sometimes it isn't there at all. I have heard it's a camera as if I am being watched or it was said to be a microphone that is turned on and listening to my conversations. I am using an 11 Pro

Now, yes I talk with someone who has had their phone hacked. Sometimes our calls to each other are blocked and sometimes we are unable to text each other because we are being blocked.

Yes, this is a whole big other issue. This phone is on my account, and it's an iPhone 12 but is a friends phone that I bought for her. We have tried new sim cards, new number and also different iPhones every time the phone gets corrupted. The police won't help, we also went to The Apple Store and that didn't help and we have reset it too many times to remember.

Any suggesting with these issues, we would greatly appreciate it.

Thank you,

Joyce