I found this post which offers an explanation for the problem and a possible solution using an app
It seems like Google removed the overscan functionality in Android 11. I believe the hide camera cutout feature depends on setting the overscan such that the top of the screen display is moved down by some pixels. Without the overscan functionality, Samsung cannot retain the hide camera cutout feature. I am using Nacho Notch now to blacken out the status and navigation bar to at least hide the camera cutout most of the time unless I need to pull down the status bar to access the quick access panel.
I have read reviews about the app. It's not perfect. Perhaps it will help or perhaps not.