Hi Rachelcsdb,
We appreciate you reaching out to us. We understand that your Lock Screen wallpaper is dimmed even if the feature is not enabled.
We’d like to gather additional details that may help us be in a better position to assist you.
Have you had the chance to restart your iPhone?
Does it help if you toggle the Dark Appearance Dims Wallpaper feature?
Do you have any case or accessories that may interfere with your device' sensors?
Have you had the chance to set up the wallpaper again?
In the meantime, we recommend that you check for a software update.
While it isn't inherently assured that an update will resolve the issue, updating to the latest software version for your device can help isolate potential software issues.
Kindly secure a backup and update.
How to back up your iPhone, iPad, and iPod touch
Update your iPhone, iPad, or iPod touch
Take care!