Webcam isn't great, but I find it perfectly serviceable. And don't forget you're likely looking at the image blown up to 5K resolution. Probably looks better at the other end.
Is it as good as a 4K fixed field-of-view webcam? No. But is anyone really going to use a built-in webcam (regardless of the display's or laptop's price) to record enduring content anyway? Likely not.
Putting a 4K webcam in likely would have required a thicker chassis and larger top bezel. Or it would have to protrude like Dell's monitor with a built-in 4K webcam. Then Apple buyers would be complaining about that.
I actually have a reason I'm considering going back to my Logitech Brio webcam instead of using the one built in to my Studio Display, and it's really got nothing to do with the quality of the webcam, and it's a unique situation likely few will encounter. We frequently use Cisco WebEx for work meetings. The macOS client for WebEx has a bug where it sees the two webcams in my two Studio Displays and will get stuck on one camera and won't switch to the other. Sometimes it'll want to use the wrong camera and won't recognize switching to the other in the app's settings. This issue only comes up in WebEx. Zoom switches between the two camera correctly, as does FaceTime and Microsoft Teams. Anyway, like I said, it's a rare situation but I'm stuck using WebEx for certain things at work.