Phone cameras are limited by their tiny lenses and sensors, yet their photos keep improving. The reason is computational photography: the phone captures several frames and uses software to combine them, reducing noise, widening the range between bright and dark, and sharpening detail far beyond what the small hardware could manage alone.
This is why phones handle night scenes, strong backlight and portrait blur so capably. The processing involves choices about how a scene should look, so results can appear more polished than reality, and different phones make different calls. The lens still matters, but today the software is often the bigger factor in the final picture.