I can’t address the tone mapping issue. I haven’t tested Video Preview Thumbnails of HDR content in a while. Did you enable Tone Mapping and add a brand new HDR show? I agree that it is a significant cosmetic issue.
Regarding the size, Video Preview Thumbnails are generated at a maximum of 320x240, regardless of source video dimensions.
Plex can be configured to make thumbnails less frequently, which reduces the space used significantly.
