Not to suggest I'm really qualified to know, but to me that looks more like a general screen defect than burn-in. I always thought burn in was something more visible on a lighter-colored background. I have no idea what that line actually is though. Reminds me a lot of the edge bleeding and bright blobs I had with numerous mobile LED screens over the years but I know OLED doesn't work that way. It certainly doesn't look very even. Computer graphics are generally straighter than that so it doesn't look like an impression of anything the display would show normally.
I used an always-on display on an Apple Watch Series 6 for two years using mostly the modular watch face. When my Series 8 arrived, I went back and displayed a solid white background on the Series 6 using the flashlight feature. It looked totally uniform. But I've heard horror stories, complete with photos, of other people getting burn-in from using the always-on display for long enough. This was probably more due to defect but the FUD has set in enough that I'm now scared to do this with my Series 8 anyway, even though I find it very frustrating to live without the feature. 🫤
I don't personally see the point of an always-on display on a phone. If I'm using my phone, I'm holding it. If I'm not holding it, I'm either trying to pay attention to something more organic, like an in-person conversation I'm having with someone, or my nose is buried in the screen of a different tech device that can offer me all the same info. I'd never lay my phone out on a table next to me because I'd be scared of someone wooshing by and stealing it. So I just don't see the case where this is helpful. Maybe I just don't get it because I already have a watch. I dunno.