I wasn't really following OAuth back in those days, but I have heard much of the history from those that were there are the time, and there were some of the failures of some of the early specs in this area for being too secure - and hence to hard to implement and failing to be adopted.
Was OAuth2 wrong to land exactly where it did on security back in 2012 or before? It seems really hard to say - it clearly didn't have great security, but it was easy to implement and where would we have ended up if it had better security but much poorer adoption?
Does the OAuth working group recognise those failures and has it worked hard to fixed them over the years since? Yes, very much so.
Has OAuth2 being adopted in use cases that do require high levels of security? Yes, absolutely, OpenBanking and OpenHealth ecosystems around the world are built on top of OAuth2. In particular the FAPI profile of OAuth2 that gives a pretty much out-of-the-box recipe for how to easily comply with the OAuth security best current practices document, https://openid.net/specs/fapi-2_0-security-profile.html (Disclaimer: I'm one of the authors of FAPI2, or at least will be when the next revision is published.)
Is it still a struggle to try and get across to people in industries that need higher security (like banking and health) that they need to stop using client secrets, ban bearer access tokens, to mandate PKCE, and so on? Yes. Yes it is. I have stories.