I am on the latest available version available on the Verizon network and still seeing regular issues when trying to zoom in on any camera mode. I am quite confident it is a hardware issues as I found what fixes it, until you zoom back out.
When you feel/hear the camera make that faint buzzing sound and the screen goes wavey as it tries to focus, give it a good forward backward shake. It may take a couple of tries until you get a feel for what I'm explaining but it makes the problem go away everytime.
Because of this, I'm confident the issue is related to hardware (at least in some cases) considering software cannot feel shakes, movement.
I also read in another thread that Samsung has confirmed its hardware and needs to be sent for warranty repair.
I first experienced this problem when I was taking a lot of pictures during a trip. Imagine being on a trip without a camera. I called support the next day and they told me to clear cache. It worked for couple pictures before it failed again. Looks like a lot of users have the same problem. Now I'm not sure if I should try to replace my phone since it's still under warranty...