I'd agree that the red boxes are likely privacy masking. The text on the image is going to be changed by a setting for overlay or channel caption / title. Both of these settings are likely to survive a reboot. Hopefully, you're lucky and this was more of a prank to alert you to the vulnerability than something truly malicious. The next hacker may not be so kind.
The bigger question is how did they get access to the camera and how can you secure it?
- If you forwarded ports in your router to the camera you should stop doing that and find a more secure method of accessing the camera.
- If UPnP is enabled on your router, disable it. UPnP allows devices on your network to automatically set up port forwarding.
- Disable P2P type services for remote access to the camera. I can't be certain, but from the screenshot you posted, I think this camera my be affected by a recent vulnerability in the P2P service used in some cameras.
- Delete any extra user accounts that have been added, change your password
- Make sure
DDNS settings weren't added to the camera
- Prevent things like guest wifi from being able to access the cameras