Juli Clover, MacRumors:

During today’s event where Apple unveiled the new MacBook Air and MacBook Pro models, there was a mention of a new image signal processor for the camera, which brings some improvements to camera quality.

And:

Apple did not, however, add new camera hardware to the two machines, and the technical specifications pages continue to list the same 720p camera used in prior-generation models.

And:

Apple says the M1 chip improves MacBook camera quality with better noise reduction, greater dynamic range, improved auto white balance, and ML-enhanced face detection

Apple leaning into machine learning to overcome hardware limitations. All you need to do is look at the newer generation iPhones to see this in practice. I’ve got a new MacBook Air on the way, looking forward to seeing this in a controlled environment, Intel MacBook Pro side-by-side with M1 MacBook Air.