I don't think that's true, I remember playing both Jak and Daxter and Ico in either 2000 or 2001 and I think both of those had camera control with the right-hand analog stick.
However, I'm not sure whether it was only used for horizontal rotation or full arbitrary rotation (arbitrary combinations of horizontal and vertical) as in Super Mario Sunshine. But it might very well be the first game to have that, not Mario Sunshine.
I just looked at a few videos and it seems that the analog stick does indeed move the camera, though apparently only horizontally, not "freely" with arbitrary rotations. I'm not sure though.
Now you made me unsure, so skimmed https://www.youtube.com/watch?v=SrsWUmiayLM for a bit, which seems to me to confirm it's just horizontal camera movement. But there seems to be a zoom in/out functionality, which would move the camera in/out+vertically, but that's different than rotating around the character freely. The camera also does a ton of vertical movements by itself too, as Mario jumps/falls.
Yeah, I think you are actually right. I must have misremembered it. This source also suggests Mario Sunshine didn't have a "free" rotating camera but a combination of horizontal rotation and zoom: https://strategywiki.org/wiki/Super_Mario_Sunshine/Controls
Of course the question is whether there might have been an earlier game which had it. Regarding Ico, apparently it also allows only horizontal rotation (camera "panning" is horizontal movement): https://strategywiki.org/wiki/ICO/Controls
