This is a deformity that is usually caused by either poor water quality or water that is too soft when the fish are developing as fry/small juveniles. I see this a lot in severums, discus, and angelfish. Notice that your fish has a “pinched” look to its tail, and both anal and dorsal fin soft rays that bend/twist at the ends. The pectoral fins on each side of its body may also be pinched or turn up or down at a 45 - 90 degree angle.
When fish are raised in poor water or soft water, their fin and bone development is often hindered by a lack of calcium and magnesium in the water. If you raise a lot of fry in cramped spaces with infrequent water changes, they will deplete the water of these minerals and develop deficiencies. I have had this problem in the past when I had 400 rapidly growing fry crammed into a 40 breeder. Even with 100% water changes daily, the fins were malformed. I remedied this by adding liquid calcium and epsom salt (magnesium) at each water change to boost the amount of minerals in the tank.
Recently I acquired a group of Heros sp. rotkeil that were all raised in RO water and every single one of them had these pinched fins. I knew the soft water had been the cause. I trimmed all their fins with sharp, sterilized scissors and after a couple months in clean, correct water they have all grown back normally. You can’t tell there was ever a problem.
It’s purely aesthetic and in most cases this deformity is environmental rather than genetic. The fish will live and breed without any issues.