It's clear this is still using a last-gen engine.
NXGamer made a good point that a lot of games we're seeing on PS5 right now, even the native ports/exclusives are just PS4 games with the dials cranked to the max, regardless of whether they look impressive or not. I'm speaking of course in the context of next-gen graphics fidelity.
...Which is the way it is basically every gen. Nice effects get draped on top of old engines (either cross-gen releases or games only released on the new platform,) polygon counts are pushed as far as it can be upped under normal methods, and we get nice-looking games for the first year or two that don't really change the paradigm. (We also get a few crazy experiments sometimes, using experimental tech that sometimes goes on to be popular across future games but sometimes remain anomalies and even great examples of what should have been more utilized but that wasn't the direction things went.) In the meantime, engine developers work on new tech to harness advanced hardware, hopefully to be ready by launch or in the first year or two.
So for example if you look at Killzone Shadowfall on PS4, it's an amazing-looking game even now, but it pretty much plays and operates as Killzone 4. (Killzone Mercenary, made for the lesser Vita on the KZ 2/3 engine, even brought back over some of its visual signatures.) PS4/XB1 was one of those nice cases where bleeding-edge, industry-defining tech was ready at launch and thus we get some of the best-looking games of the gen right off the bat; PBR was revolutionary in look and resourcefulness, and KZ:SF (and Ryse on Xbox) could stand strong even now as a visual technology examples of the hardware being utilized well. But when compared to Horizon, the real purpose of the brand new Decima became clear.
This gen has
sucked for timing. We had a few games using the hardware for advanced technical experiments (R&C Rift Apart, to a lesser extent The Medium and maybe others,) but there's not really been a breakthrough graphical advance ready for launch. Unreal Engine 5's heart-stopping showcase also gave us maybe too-early a look at tech of the future (Epic first showed it in May of 2020, with a "playable" and amazing demo that made it seem just around the corner and surely something all the elite developers must have had access to for years and years, yet we found out later that even close partner The Coalition didn't get hands on it until that November (they were still prototyping their Alpha Point project through Oct in UE4 to have something ready to test,) and although the public had Early Access copies in May of 2021, that was a "true" Early Access build, still not fully vetted for mainstream production despite its amazing Nanite and Lumen additions. (We're still only now seeing indie and upstart studios announcing UE5 titles, games that would have been out in the second half of the first year of UE4, although people forget how slow UE4 took to finally get into mainstream games.) Then also, of course, COVID, which delayed most everything from happening by a year or more.
(BTW, instead of graphics, loading speed advancements have been this gen's "drape nice newness over old engines." And it's been as impressive as any graphics effect could be, in many opinions, but it's not the typical showcase feature gamers expect, nor is it "revolutionary" in PC gaming, despite the optimizations made that even old PCs with SSDs couldn't take advantage of. Meanwhile, physics and other cool shit you can do with this new tech unrelated to graphics is still MIA...)
What all else you can do with the hardware is still in the works. Some of it has appeared in the most recent game announcements for 2023 and beyond (I'm not really loving the complexity or ingenuity of the first wave of UE5 titles, but at least new lighting systems give everything a pretty sheen... TLoU P1 is really the worst of everything going on, with not really any advancements in tech and supposedly a rescued, rushed project after a botched attempt by a different developer.) Some really hasn't been shown in an actual product as far as what to really expect when these boxes are pushed hard. (Hopefully Nanite and Lumen and Unity's character modeling systems and all this stuff remain performative; Matrix Awakens ran okay but wasn't completely reassuring despite looking the part of a next-gen product.) And some... some might unfortunately be in our heads as far as far as what you can and can't do interactively with the state of technology as it is today.