We're having a similar issue transferring from Watch to Phone. The files transfer, but the completion is never notified so the files are left on the Watch. We had no issues with previous versions, this only started happening after devices were updated to iOS 17.5 and watchOS 10.5. This is critical functionality for us, so we need to have this resolved quickly.

Are there any updates on this? We've developed a workaround, but we're still a few weeks away from being able to release the update, and our current users are unable to fully use the app if they've updated their Watch and/or Phone.