macOS Catalina Preview.app cannot create signature with built-in camera
Solution 1:
You have to hold your signature ON the blue line, like that was a line on a page where you are signing.
The camera's view of your paper is mirror image. However, once Preview detects your signature, it will digitise it and display it correctly (non-mirror), and in a way that looks like you'd actually signed the screen (i.e. it's not just a picture of your paper).
In the image below you can see the digitised image in black, with my paper, with blue ink, somewhat obscured in the background:
