There is no plausible way I know of for an induction cooktop to accidentally heat only a small area. Given the physics of the thing, it’s all or nothing. What you’re looking at there is a low-quality induction cooktop, from a manufacturer who decided to not make a high-quality induction cooktop.
.....Buuuuut, just to set the right expectations, an iron pan is going to show a cooktop at its worst. Cast iron has low thermal conductivity. It’ll make hotspots their most hot-spotty, compared to an aluminum or copper pan. If you’d put an aluminum-core pan on that burner, you’d see a convex disc of boiling.