It’s both.
If you look through Camera app at 1x, things look very much 1:1. I think this was by design.
That’s not what 1:1 means when talking about macro photography.
The term “macro photography” goes back to film photography. Macro was defined to mean that the image on the negative was the same size or bigger than the actual object. So if you take a picture of an inch-long bug, the image is at least an inch long. The definition carries over to digital photography, although it is less relevant since we never see the size of the image on the sensor array. But I doubt that Apple is using the term that way, since iPhone sensor arrays are so small.
Just to clarify, the “X factor” thread here isn’t about “macro” photography per se; it’s about the “X” multiplier on the screen and what that implies.
But your point still stands as being technically correct:
But that definition hasn’t been used on pop devices, iPhone included, for a very long time :-) And to convince yourself:
- open Camera app on your iPhone
- tap 1x and shoot, even a very close up subject
- measure the size of the subject in real life
I promise you that that’s bigger than the sensor in your iPhone :-) And if you repeat those steps using Auto Macro mode, rather than 1x, in step (2), you will again have a subject that is much bigger than the sensor. But Apple still calls it “macro” photography.
The way it looks to me, iPhone has calibrated “1x” (ie, zero zoom) to be a “normal” (ie, not wide-angle, not telephoto) lens. Perhaps they had the lenses manufactured that way; perhaps they used software to compensate for the lens defaults. Either way, they clearly want 1x to imply “normal”.
As far as “macro”, Apple has clearly also appropriated this term for the modern age. On iPhone, it doesn’t mean a 1:1 (or higher) ratio between sensor projection and subject. Instead, it appears to mean the photography of subjects that previously required true macro lenses to shoot; or they may simply mean anything fairly close up 
That X in the camera app as you zoom in is a relative focal length (24m basis), determined either for digital zoom or optical zoom, depending on model and settings. It has nothing to do with the subject you’re focusing on be it an ant or a building, just like any other zoom lens. Apple fudges a few things for marketing, but not everything.
The display size is irrelevant, only the sensor matters for the amount of detail you can see. As an extreme example, consider a microscope as yet another camera lens:
I have lots of eye floaters which means that I can’t use a microscope directly with my eyes above about 100x. I got a wifi camera for my compound scope, which lets me display the image on any device that has a web browser. The sensor is 1/1.8". But I can display that image on anything from my iphone 13 mini through my 27" imac monitor. It’s the same image, the same number of pixels, the same actual magnification of whatever the scope is set to. I get to view 400x comfortably without the floater interference, but there are no more details available on the iMac than on the sensor. The enlargement is “empty magnification” (which is obviously not always useless). Empty magnification is the primary way that companies lie about the capabilities of low end microscopes, including those little usb microscopes.
Why do we want closeups at all? Because there are things to look at that we can’t see with our eyes. All of them are interesting, and many are beautiful. But for that to happen, whatever system we use needs to show those details as faithfully as possible. Physics makes us fight for it and sets hard limits. Those limits mean that small sensors and the lenses that match them cannot resolve as much detail as a larger sensor and the lenses that match those. Computation can help, but only to a point. The TV trope of zooming in and in and in until you can see the iris print of a suspect ‘because computers’ is pure fantasy.
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Another friend taking killer macro with a Samsung, this time the S24:
Sounds like all these moving parts involving zoom ratio, lens, and Portrait setting are all about to change:
I’m not happy to see that they might regress the 5x optical zoom back to 3.5x, even with the increased pixel count (and therefore digital zoom).