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It does on a cheap front facing camera!

This makes no sense. Both the full image and it's inset cousin are created from a single camera lens at the exact same moment in time. If one is "mirrored" then so should the other.

Besides, the whole *point* of the inset is to show you what the other person is seeing from your camera. What point would there be for the image to contain mirroring, flipping or any other modification?
 
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