My app was having this issue too, but I found the solution! [Xcode 26.6]
The fix was to set Launch Screen in the Info.plist file - the dictionary doesn't need any items, as long as it's in the file, the app will return to normal size.
The cause comes from the app defaulting back to rendering the iPhone 4S compatibility mode (with screen size (320, 480) pixels) which is why it's squished.
Topic:
UI Frameworks
SubTopic:
SwiftUI