iPhone 12 mini owner here sensitive to this issue. Couple thoughts: First, I'm very sensitive to motion sickness, particularly in a vehicle or while on a boat. At one point I bought a DLP projector and had to return it because I could easily detect the
rainbow effect and couldn't watch a movie without feeling nauseous. I would hazard that both of the above are correlated to PWM sensitivity, and I'm curious if other people here have similar sensitivities.
My response to the PWM of the phone may be less extreme than others, as it induces dizziness but not quite nausea. Even so, it's been nasty to the point I was definitely planning to return the phone. However, I have been able to minimize the problem by following the advice of another poster - set the brightness to 100%, white point to 70%, high contrast on, Auto Brightness off. Additionally I have True Tone enabled and Night Shift on. I turned off Face ID awareness, though I'm skeptical that matters. So far, with these settings, I've been able to go a full day of heavy usage without issue.
One thing to be aware of is that iOS apparently forces a lower brightness if the device gets hot, but doesn't give you any indication of this. It effectively caps the physical brightness level, but the brightness bar will still show at 100% for example. For me, this happens while charging. You can tell if it's doing this by changing the brightness setting and seeing if it actually brightens the device at all points. I've seen it cap at varying levels - approximately 50%, 75% and 90%. Lower brightness means a lower PWM rate, which makes the problem more acute for me.