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I've had this (very agressive de-noising I think it is - it's at least almost identical) since I got my iPhone 6S in 2015: basically if you look at 1:1 (i.e. on a computer, as opposed to the small screen of the phone), it almost looks like a watercolour painting, due to how agressive it is.

You can pretty much see it in almost all iPhone camera review sample images (and that of phones from other manufacturers).

Even in photos taken in direct bright sunlight!

I imagine it has an added side 'benefit' (due to the lack of noise/grain) of decreasing the images' sizes after compression.

That's exactly why I switched to a Pixel.

I have a cheaper phone that has this, makes your face look weird, it's too smooth

LG Stylo 6 has "AI cam"

I sometimes use the NightCap app for photos, and it doesn't have that AI bullshit.