This could be because either your computer is under powered for Virtual Backgrounds, or your camera is struggling to distinguish between you and the background. Lighting can often improve this. Or moving to a location with a simpler physical background. Or using an external camera (if you have using an in-built one now).
Adding on to @Rupert's post! @kosenrufu I'd also check the Virtual Background dimensions that you have. Here's what's stated in our KB article ⤵️
There are no size restrictions when adding your own virtual backgrounds, but we recommend cropping the image to match the aspect ratio of your camera before uploading it. Example: If your camera is set to 16:9, an image of 1280 by 720 pixels or 1920 by 1080 pixels would work well.
If you're not sure about your camera aspect ratio, use a background image with a minimum resolution of 1280 by 720 pixels.