From the photos, I would say it looks normal and is working correctly. I doubt that replacing it will help, and changing to a different brand of dashcam wont help much, certainly not for reading signs unless you spend a lot more.
It is a difficult situation with a very bright sunny sky but the road and trees are in darkness. All cameras are going to struggle in that situation, not just dashcams.
As for pixilation in the dark areas, that is also normal, with all dashcams being affected to some extent. With the B1W it is more obvious than most due to it using a low bitrate, but that doesn't stop it being an effective dashcam. If you want to make a movie with perfect images then you need a movie camera, not a $50 dashcam designed for capturing accident evidence.