What you have there is the thumbnail stored inside a normal EXIF JPEG file.

The size 160×120 is a significant clue that this is where these thumbnails come in, because although I don't think the standard mandates a particular size, 160×120 is incredibly common. (My DSLR saves thumbnails that size, and in fact "letterboxes" the 3:2 images with black bars to fit the aspect ratio.) It must have seemed like a good idea at the time the EXIF standard was written, but these tiny thumbnails are so low quality and so small that they are rarely actually used for anything — yet most JPEG files still contain them.

Recovery software works by scanning your data disk block by disk block (or even byte by byte) regardless of any filesystem structure, looking for blocks of data which appear JPEG-like. The thumbnails are perfectly normal JPEG files themselves, so recovery software will pick them up.

If that's all you're getting, it's likely that the filesystem you're trying to recover from is so messed up that the big files can't be reconstructed, but the tiny internal thumbnails will sometimes fit in a single disk block (or maybe two together), so they're more likely to be intact. Logically, this symptom is more common when trying to recover from a highly-fragmented drive.