Problem with Retouch function in Photos

The Retouch Brush has two modes in the earlier versions of Photos (macOS Sonoma or earlier):

1. Retouching: In this mode it is working as described by Richard, it will remove a blemish by interpolating colors and texture from the area around the blemish to fill it seamlessly.
2. Cloning: In this mode a texture from another area will be cloned to replace the blemish. This is very convenient, if you want to replace larger objects like a garbage can by something nicer like a flower pot.

It looks like you might have triggered the cloning mode instead of the retouch mode. Cloning is triggered by holding down the options key ⌥ while clicking the area that you want to clone to replace the blemish. See: Retouch a photo to fix marks and blemishes in Photos on Mac - Apple Support (EG)

But if you are using macOS Sequoia or later, the Retouch Tool has been replaced by the Clean Up Tool. Remove distractions and imperfections from your photos on Mac - Apple Support (EG)

The Clean Up Tool makes it easy to paint in a new texture to replace large objects by a fitting background, but sometimes the artificial intelligence giving very surprising results because of the safety filter:

• When trying to remove freckles from a face, the face might be covered with large blocks instead to make it unrecognizable,
• Or if the AI suspects nudity, it will cover the bodies.

Could it be that you have been using the new Clean-Up tool instead of Retouch?

You don't say what OS you're using-- can you tell us that?

Retouch works by replacing a spot with stuff that's around it, so you do sometimes get weird stuff. It matters if I swipe from a place of lower brightness or from a bright spot, for instance.

How much free storage do you have? It's recommended to keep at least 10% of the storage free. I saw some crazy stuff when I had less than 150GB free on a 1000GB MacAir, for instance.

To narrow things down, try these steps:

• Restart the computer (of course)
• Re-start in Safe Mode. This bypasses certain potentially disruptive processes, and it often helps. Safe Mode is different for different computers, so see this: 

           Start up your Mac in safe mode - Apple Support 

• Use another library if you have one, or make a small test Library with a few pictures in it and see if the same thing happens. You can create a new Library by closing Photos and then option-clicking on the Photos icon.
• Make a new user and see if the same problem recurs with it.  This is a bit harder, because a new user can't access a different user's stuff. You would need to temporarily move your Library out of your own user's Pictuers folder up to the general "Users" folder. 
• Rebuild your Photos Library--close Photos and re-launch by option-command-clicking the app icon. You didn't say if you use iCloud Photos, but if so it’s possible that this will cause a re-sync that lasts long enough to make you nervous.

The idea is to find out if the problem is with the Library, with your account, or with caches and login items, and stuff like that. One of these steps may fix the problem, but their failure to work also helps figure out what's happening.

Let us know what happens…