There have been several questions about policies for ensuring employees have their cameras on during Teams meetings. The consensus is that it's recommended and encouraged, but not mandatory. However, almost all have focused on the engagement, performance, or courtesy perspective, rather than information security or data protection i.e. having assurance that the location is appropriate, headset being used (not using speakers) etc. Has anyone else had these issues arise, and if so, how was it managed? 

Well - it depends on the countries law. In Germany quite often you have to get approvals from worker council for such default settings. I agree - that video can lead to more interaction but not necessarily. I would say much more important is a stable and clear audio integration between all participants - and one screen sharing is active I would say video picture is not so important and sometimes distracts. Anyways - once attendees are free to use the video and it is only encouraged you are on the safe side & with virtual background even more. 
What we already highlighted to Microsoft is - give us the option to equip our users with some centralized policy-based starter settings/configuration of teams (e.g. virtual background, camera turned on, email notifications for missed chats is off - and then users can overwrite those starter policies as they wish).

I agree. Camera use during work meetings should be encouraged to boost engagement, while still allowing exceptions when needed. Virtual backgrounds offered by most video platforms help address privacy concerns about surroundings. When only some participants have their video on, it can hinder meaningful interaction. This is especially important during one-on-one discussions or interviews—if one or both participants keep their camera off, it can limit the quality of the conversation and connection.