Well I don't agree that they haven't improved much.... *BUT* if they were going to pick on an older phone to prove the point, the Nokia 808 PureView was an excellent choice. I remember it coming out, and a little later, the Nokia Lumia 1020 with windows mobile which I still love to this day.
A guy at work got the 1020 and was all "this is as good as one of your big slrs".... kinda scoffed until we tried a few tests and yeah it was truly fantastic. Ahead of its time for sure.
Of course... in low light it was rubbish compared to what we have today, dynamic range was great at the time but nothing like as good as today's crop of phones and let's not even bother talking video
BUT you're right that over processing is definitely a thing nowadays. Not even just oversharpening, though there's penty of that for sure, but playing fast and loose with colour temperature and now, AI REALLY changing things all definitely have huge effects.
Somewhere I have a couple of pixel 7 pro photos taken almost right after each other... in one, the AI has done a brilliant job of making it look like it's from a much more expensive camera, in the other, it's REALLY messed up and blurred half the image because it thought it would be out of focus whilst the top half is over sharpened. A real mess.
I do hope that camera development doesn't slow up and that all we get from now on is similar hardware and more clever AI
I very much want larger sensors, better lenses etc.