Is Photoshop downscaling my iPhone photos?

I usually use a DSLR for photos that matter. But today at the beach, nice and bright, I used my iPhone 12 mini. When importing them into Photoshop they look very low res. I note that in the Photos app they are 4032 x 3024, but Photoshop says they are just 1024 x 768. Why is this the case and how to I prevent it?

...Minutes later...

I was dragging directly from the app to the Photoshop icon to open the file. When I drag to Mac desktop and open, the full resolution photo appears. Is there some way to cause the full res photo to be dragged to Photoshop from the app? Actually, at full res the photo is still horribly pixelated and crude. The ISO is just 32. I looks like a photo taken with a first generation Sony digital camera in the early 2000s. I must be doing something wrong. It looks just as bad in Photos or Preview, so it don't fall to Photoshop. I'm viewing in on a a 15-in M2 Mac.

Maybe because I wasn't storing the originals on the Mac but in the Cloud? I just changed that setting.

Stream of consciousness....