A halo around subjects in every shot usually points to an optical issue rather than a lighting setting. Common causes are:

• a dirty lens, especially fingerprints, grease, or haze
• residue on a protective cover or front element
• internal haze, fungus, or damage in the lens assembly
• strong in-camera sharpening creating edge halos

Start with the simple checks: carefully clean the front lens surface with a proper lens cloth, and make sure there is no protective film, smudge, or condensation on it. If the camera has image settings for sharpness or picture effects, reset the camera to defaults and test again.

If the halo appears in all conditions, with and without flash, and after cleaning/resetting, the camera may have an internal lens fault. On a compact camera like the FS35, that usually requires professional service, and repair may not be economical compared with replacement.