iPadOS 18 Wallpaper unexpected behavior when rotating screen

iOS 18, iPad Pro: Custom Wallpaper on Home Screen jumps on rotation from landscape to horizontal and vice versa

When I set up a custom wallpaper, the image jumps when I rotate my iPad.

It jumps to a totally different zoom level and it is no longer cropped.

(Btw. The flag is wrong…I am not on an Air 2, I am using an iPad Pro M1, with the latest iPadOS 18)

[Re-Titled by Moderator]