I am also having the same issue but on IPadOS 17.1.1 Occurring only once updated to IPadOS 17, IPadOS 16 continues to not have an issue.

I am also running into the exact same issue. It was working on beta 26.2 and now suddenly it is not working on beta 26.3. Error 2 as well. The only sensitive information that is being handled is health information. I would think that should be allowed.