Thanks for your reply, and sorry for my confusing post: there is no camera bug in your lovely game. My 3-year-old can usually have fun playing, but lacks the skill to control the camera Y-axis, and especially ends up getting himself stuck with it pointing up at the marshmellow's bottom! I can reset the camera for him with the stick, but he can't figure out that this is what he needs to do.
My wife somewhat has the same problem, as she's not really played 3D games and 3rd-person camera controls just aren't intuitive to her (better than 1st person, however). It doesn't really need fixing, it was just feedback, maybe for whatever you make next.