Frank,
Perhaps Emma, the plugin developer, will respond to this. It may be a matter for a future development. All I can offer you is some explanation of how the plugin works, and thus why the images might not be optimal.
The plugin uses the Bluesky API, which provides a mechanism for inserting post data directly into the Bluesky database. The key parts are the title, description, and image. These parts are retrieved as OpenGraph data from the published website, not from the WP database. This is a process known as scraping. So, it matters what your WP template is posting in the headers. (This is also the process used by Facebook and Twitter, so getting it right will affect all three.)
Check your WP posts. Look at the source code to see what headers are being posted. If the header contains a <meta property=”og:image” …> tag, check the image to see its width and height. The plugin does not create thumbnails or modify the images posted. It pulls the image data from the published website and then passes this og:image content to Bluesky.
The ideal post image on Bluesky is 16:9, or 1200×675 px. If you use an image with other dimensions it will be scaled to fit. I believe that width is the controlling dimension, so a 600×600 image will be scaled to 1200 wide, and cropped to 675 high.
It is possible, but unlikely, that your WP template might not use og:image tags, but might have a fb:image, twitter:image, or X:image. See if you can modify your template to add the og:image tag.
Note to Bluesky developers: a helpful feature would be a mechanism to force Bluesky to re-scrape a website.