It isn't broken, it's made so the image also looks good in landscape mode. Turn your phone around in an app with landscape support and you'll see.

I did notice one thing wrt this, namely that any ambiences created before the update need to be removed and recreated, otherwise they won't turn around when the device is in landscape mode - come to think of it this is probably quite logical, assuming the ambiences are saved as an image somewhere, they would look terrible if the update automatically made them work in landscape as well.