Vibrant visuals is not available in splitscreen local co-op on ps5. As soon as a second player joins, the graphics switch to simple for both sides. Supppposedly this is because the system could not handle running both screens. However; I believe it must be a feature meant for other consoles that is leftover from the port and would have to be tweaked for PS5.
This is not a bug, see MCPE-201865.