I’m having the same problem with my product thumbnails across my website (product page, or previews). They are also 1200×1200 px and show very blurred as thumbnails. I just went to make sure I also had the PHP memory high in my cpanel.
Additionally when at a product description page, when I click to enlarge, it enlarges and squishes the image. I would like it to automatically open to the largest size available since the first zoom is not any larger than the original preview image, and is squished.
Thank you 🙂