It is absolutely worse, and other people's know have noticed as well. iOS 26 was the biggest drop in quality by far (haven't updated to 27 yet, so I don't know if it changed at all).
I'm leaving the above 'typo' in as an example of it. I initially typed "people I", and it showed up as "people I" at first, but after typing more it subtly and retroactively changed it to "people's". That's not something that should happen in general. It doesn't make sense grammatically or contextually, and S isn't anywhere near I on the keyboard.
That's not counting at least one other instance in this not-so-long comment where it did the same with "should" -> "show", but I fixed that one. I'm baffled no one at Apple seemed to notice and/or care that they actively made the keyboard worse.