Why are my shapes pixelated when zoomed in?

It pixelates because Photoshop, as a pixel-based image editor, is always limited by the dimensions you entered when you created a new document, which you see there in the Image Size dialog box. 7680 x 2160 px is a relatively high resolution document. But it still isn’t infinite, so how far you can enlarge is still limited by the pixel dimensions. In a photo editor, higher resolution just means you get to enlarge further before pixelation happens.

Your screen shot shows that you have zoomed in over 400% At 100%, you see one image pixel for every display pixel. At 400% every pixel of the image is now 4 display pixels tall and wide, so of course they become more visible.

In a vector-based application such as Illustrator, that doesn’t happen because the vectors are constantly rendered to use all the pixels available at the current level of magnification or enlargement. Although you can also set an Illustrator document to be a specific number of pixels tall and wide, that’s just to have a reference for final output — the resolution of the Illustrator vector objects themselves is not limited, and you see that when you zoom in.

dinukapj wrote:

How do I get these to be vector shapes?

You can use the shape tools in Photoshop, because they create vector-based shape layers. For example, use the Rectangle tool instead of the Rectangular Marquee tool. As in Illustrator, shape layers don’t have a limited resolution, but in Photoshop they are still limited by the pixel dimensions of the document, so zooming in far enough will still pixelate shape layers in Photoshop. You can increase the document pixel dimensions, but all that does is push out the limit; pixelation will still be possible if you enlarge the image enough.