I started having this issue today, annoyingly. I can’t tell which camera the blurry still is coming from. Unplugging and plugging back in the lightning cable is fixing it so far. I can verify it in Photo Booth before turning it on in Zoom.
I rebooted my Mac today and it started working, so that was the solution. Now it’s time for my unpopular opinion: It’s not that great. I don’t see the image quality as being much better than the much maligned camera on my Studio Display (it’s a bit better, but nothing spectacular). I’ll keep playing with it.
Out of interest, has anyone figured out a way to make the continuity camera work from the front camera instead of the rear camera? It looks like it isn’t possible, but I really think it should be!
I don’t have a third party webcam, and until the continuity camera function was ‘released’ I was using my MBP’s camera. This was very irritating because I prefer to have my MBP closed (I use an external monitor), and also because I hardly ever look like I’m looking at the screen because I’m looking at my external monitor. I hadn’t got around to buying a webcam, and also to be honest I just wasn’t keen on the additional software I might need to install.
Continuity camera therefore is a nice solution to a tech issue of my own making, but by only using the rear camera they’ve really restricted the functionality (for me). I have no issue with my phone being mounted all day (I’m using the Twelve South Hoverbar), but since I have to turn around the phone to use the continuity camera its use is severely limited. It requires “undocking” the phone and flipping it, which is stupid! If continuity camera could be set to use the front camera, all I’d have to do is rotate my phone 90° when I enter a meeting. In addition, because the phone has to be flipped to use continuity camera, I can’t see the screen if I get a notification!
I completely agree with @Bmosbacker’s comment about sometimes needing to send texts, I agree with @Jezmund_Berserker’s laughs about never using phones in meetings (some meetings are just that boring!), and I would also offer a third scenario I’ve been caught out twice with in the last week: 2FA during a meeting that sends a text to your phone… Twice now I’ve been unable to open a Google Doc shared during a meeting because 2FA was required and I couldn’t get the text due to using continuity camera (for those pondering, Google’s 2FA doesn’t show up on Mac’s iMessages, only on the phone). If it used the front facing camera, this wouldn’t be an issue.
So my view is: a good idea, poorly executed.
I do wonder if I’m just making life unnecessarily hard for myself and should buy a blooming webcam (which would have been cheaper than Twelve South’s stand 
).
I assume you can’t set your computer to get your 2FA and other notifications for some reason?
Apple makes that possible, so maybe the folks at Apple – and many/most of the enthusiastic beta testers? – have all those features turned on, so it may not occur to them during testing that this would be an issue
This prediction of mine from late 2022 aged like milk.
After owning a new iPhone 15 Pro Max for a couple of months—an upgrade from a 2018 iPhone XS—I got an inexpensive stand for Continuity Camera, which attaches to the top of my desktop display. I’ve been using Continuity Camera for several meetings and I like it a lot.
Takes about five seconds. The Magsafe mount that lives on top of my monitor is super-easy to use.
Even back in 2022, I shouldn’t have made this statement. Why do I want to use the iPhone if I’m at my Mac?
It’s no time or trouble at all.
I’m still not fussing with standing up a professional video setup.
But a better camera is, well, better. Continuity Camera is better than my Logitech camera. It’s easy to use, costs $22 for the stand, so why not use it?
I guess my prediction still looked good after a few months but now, not so much.
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Why not use the XS iPhone as your continuity camera? The camera is still great compared to most webcams, and you can still use your main phone without having to disconnect if you happen to need it.
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That’s a possibility if I decide using the Pro Max is too much hassle. Honestly, though, I’m pleasantly surprised by how easy it is to magnetically attach the Pro Max to the MagSafe holder.
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Don’t tell anyone but one of the reasons I justified my iPhone 13 mini is because I could use it for work calls 
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I don’t think it’s worth the hassle to get slightly better image quality, but then I spent a fortune on a Poly P15 during Covid so I didn’t have to use a headset.
I bought it for the audio, but the video is also much better than the built-in camera on my MBP.
When I’m in the office two days a week I usually do all meetings in person.
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Problem with using Continuity Camera for meetings: My phone lives either in my pocket or in a charging cradle on my desk. So now when I get off a meeting and want to step away from my desk, I pat my pocket. No phone. Look at the charging cradle. Where the heck is my phone?
Oh, yeah, it’s on top of my monitor.
Every. Single. Time.
You’ll probably get used to it eventually, and if not, you can always use the XS Pro as your Continuity Camera. 
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