I don’t get why they don’t just make it a bit bigger on the inside so that when pressurized, the pressure itself seals it. Seems like a fail safe solution instead of this shadiness.

It’s a door plug, which means it’s meant to be replaced with an actual door if required, so a lot of the hardware for an actual door are in place. Doors are designed to slide in, then raise up so the stop pins engage the stop fittings from the inside, so the door is in effect bigger than the hole it’s in. this video provides a detailed explanation of how it works.

The big issue here is that the airplane is only 2 months old, it was delivered from Boeing in late October. Which means it’s either a design flaw or a process flaw in the original manufacturing. This smacks of corporate cost cutting again. Boeing are totally on the hook for this and it’s only lucky there were no lives lost. You watch, they’ll blame it on the airline initially but the fault will come back round to them again.

That's how the normal doors work because they aren't permanently secured in place. The reason is weight as it pretty much always is in aviation design.