The lighting is probably causing the issue. I've had similar problems before I fixed my lighting issue with the ring light.

"Ensure there's enough light in the room otherwise your virtual background might sometimes blend with your real background. Move closer to the window or turn on all the lights." More suggestions and help here:
-- Troubleshooting Zoom Virtual Background Issues: https://www.technipages.com/troubleshooting-zoom-virtual-background-issues

Are your settings set to use a green screen? Some people use a physical green screen behind them then tell the settings you are using a green screen. Then when you add a virtual background your face, hands and the rest of you show up with the virtual background behind you. --- YouTube video explanation:

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