I can confirm that this issue is with the missing LaunchScreen storyboard file (and is still an issue as of Xcode 12.4) I have logged a bug report via the Feedback Assistant.

Unfortunately it appears that the Augmented Reality Template is slightly broken and is still currently an issue as of Xcode version 12.4. The issue with the template is that it is missing a LaunchScreen.storyboard file and this causes the app to launch into a compatibility mode which results in the letterbox view you are seeing. I have logged this as a feedback item and hopefully it will be resolved in a future release of Xcode but in the meantime there are a couple of options to resolve this: Option 1: Create a LaunchScreen.storyboard file and ensure the "Launch Screen Image" is set to the LaunchScreen.storyboard in General - App Icons and Launch Images. Option 2: Create a new project using the default "App" template and then just copy your code across.

Unfortunately it appears that the Augmented Reality Template is slightly broken and is still currently an issue as of Xcode version 12.4. The issue with the template is that it is missing a LaunchScreen.storyboard file and this causes the app to launch into a compatibility mode which results in the letterbox view you are seeing. Hopefully this will be resolved in a future release of Xcode but in the mean time there are a couple of options to resolve this: Option 1: Create a LaunchScreen.storyboard file and ensure the "Launch Screen Image" is set to the LaunchScreen.storyboard in General - App Icons and Launch Images. Option 2: Create a new project using the default "App" template and then just copy your code across.