I agree that the effect looks like digital image stabilization being pushed beyond what it can cope with, similar to how Premiere Pro Warp Stabilizer looks when Subspace Warp is used with extremely shaky footage. I do not think anything is wrong with the camera.
The cause is probably two things combined: Digital image stabilization is turned on in the phone, and the phone is subjected to an extreme move. The digital stabilization can only compensate by applying extreme distortion, which ends up looking wobbly and wavy. All image stabilization is designed to compensate for little shakes, not big ones.
The reason you see it at the beginning is probably because you're setting up your shot, you haven't gotten the camera framed yet so the camera is being jerked around a lot. The content inside the frame changes too quickly, so there is not enough consistent content in the frame to use to synthesize a stabilized result, so the result looks bad.
The best way to cure this is to use the stabilization the way it was designed: To compensate for minor hand shakes while the camera is being held relatively still. Don't expect it to stabilize large jerky motions like when you've just grabbed the phone out of your pocket and are still trying to get the shot framed at the beginning. Let it settle down and then start the real shot. And during the shot, you still need to concentrate on holding the camera steady. If you hold the camera steady enough, the stabilization will take care of the little shakes and the shot will look good, as in the rest of your video.
There are lots of clips on YouTube from different cameras where the wobbly effect is through the entire video, because someone was using the camera while walking, running, or climbing. It's the same problem: The shakiness is too much for digital stabilization to fix without unwanted distortion.
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