This appears to be a Squarespace bug and it would be worth reporting this to Squarespace Customer Care. It occurs when the Aspect Ratio is set to 1:1 and the Design is set to Carousel (in Design > Product Items).
In this configuration, the object-fit property is being changed on mobile resulting in the crop. Choosing different options will prevent this although a quick workaround may be to add the following to Design > Custom CSS. You'll need to save the changes and refresh the site before it will take effect.
.ProductItem-gallery-slides-item-image {
 object-fit: contain!important;
}
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