According to The Verge, Google is aware of the issue and is working on a firmware fix, but it still has to test and verify so it's not clear when it will be released.

Though the issue does not seem to be widespread but is causing afflicted Pixel 5 devices to be downgraded to Widevine's L3 status, instead of the usual Widevine L1, which is what authenticates to allow for HD and HDR playback for Netflix, among other things. The issue appears to have been exacerbated by the recent April security update for the phone, although it's not clear if the two are actually linked.

Widevine is a Google DRM service, which is used by a variety of premium streaming companies, including Netflix, Amazon Prime, Disney Plus, and Google Play Movies. The content is secured using a three-level system. L1 is the most secure and ensures that all content processing and cryptography is handled within a trusted execution environment on the device's processor.

L2 devices only execute cryptography operations within that secure environment, while L3 devices don't do any content processing or cryptography operations in a secure area of the chipset. Generally, in order to ensure that streamed content doesn't get stolen, companies mandate that higher-quality HD, HDR, and 4K versions of movies and shows be limited to the more secure L1 devices.

As per The Verge, Google's Pixel phones should be L1-rated devices, but the aforementioned issue seems to be causing them to register as L3 hardware instead.