@TheCamMan 

Is this phenomenon exclusive to human subjects, or does it also occur with other objects, especially moving ones?

There are several factors that might lead to pixeled and burry image, for security camera, a common cause derive from complex scene. In scenarios where multiple moving objects (e.g., people, vehicles) interact within a visually busy environment (e.g., areas with varied colors/textures), the camera’s processing workload increases significantly. In this case, camera may temporarily prioritize real-time streaming over image clarity. This trade-off can lead to pixelation, similar to how smartphone cameras may struggle with motion blur in low-light conditions.

  @TheCamMan 

Which video quality does the camera use? Try to adjust it to 2K, see if that helps. >> Go to camera Device Settings page -- Video & Display --Video Quality. 

At what height is the camera installed? Are there any changes when the people move closer to the camera?

  @TheCamMan 

Can you share some videos here? We can help to take a look. You may upload the video to your personal cloud drive or video websites like YouTube, then send the link here, or send to me privately through a message.