Blurry pictures

Which iPhone model do you use?

Did you already force restart your device after the update?

Force restart iPhone - Apple Support

Do you have a case with magnetic clips attached to your device? If near the lens, magnetic clips can influence the focus mechanism of the camera.

Are you using iCloud photos and you have chosen to optimize the storage space on your phone?

In that case all of your photos will show just a thumbnail and the full resolution of the picture will be downloaded from iCloud if you tap on it in order to start the download into your photo library.

Did you also try to set it back to factory settings, using the computer?

Restore your iPhone, iPad, or iPod to factory settings - Apple Support

Then set it up "As new device" without using the latest backup and set it up manually.

Choose in the settings for iCloud Photos, to "Download and Keep Originals"

After that test your camera and see if your photos come up as normal again in your Photo App.

Manage your photo and video storage - Apple Support

Is there enough free space on your iPhone and in iCloud?

In case your iPhone is not having enough free space, uploads to iCloud will take longer than usual.

Before you start, make sure to transfer your photos from iCloud to your computer, just to be safe.

Archive or make copies of the information you store in iCloud - Apple Support