First off, no one said perfect lighting was necessary; the word adequate was used.
My mistake, although I've noticed over processing in more-than-adequate lighting, so that's not really true in my experience.
Choosing RAW is recommended as a very simple choice if one wants to help minimize processing, since JPEG captures by definition mean heavier computer processing and much less image data captured.
Not great for non-Pro models, where RAW isn't an option. It also shouldn't be necessary though. Older iPhones (eg iPhone 7 Plus) could take photos in similar conditions and far more usable and less over-processed results. This is, in fact, a problem to be fixed.
So no, it is not "pretty bad and probably something that warrants complaining about/fixing."
I disagree.
Poor technique (and it is often in my observation very poor technique) forces an iPhone's computational photography to correct for the poor technique as it attempts to provide a viewable image capture. The totally logical result is an image that looks over processed. The solution is for users to learn how to hold the phone still and pay attention to having adequate light, not "something that warrants complaining about/fixing."
I'm a fairly competent hobbyist photographer, and have experience working on shoots with professional photographers and videographers. In understand how to use lighting, etc. I've also taken a ton of great shots on a range of different setups, from iPhones to Androids to Windows phones, Sony, Canon, Nikon, etc. I'm not saying this to say I'm a great photographer, just that I'm more competent than an average person, and on modern iPhones, the processing is heavy-handed and bad.
You can see the AI schmultz when you zoom in on signs, you can see fur and hair looking weird and unnatural, etc. I've compared photos between my 7 Plus and 13 and noticed that in many ways the 13 was better, but has brutal processing that can often ruin a shot that the 7 Plus captured no problem. (and yes, before you mention it, I've also taken RAW shots on Pro phones. The bad processing is still there.)
It absolutely needs fixing.