Turn off Blur for the group fixed this issue and was able to submit app for review. It is not the best but at least is a workaround.

I have just tried with Xcode 26 RC and still get the same error "ITMS-90717: Invalid large app icon". I have tested with only SVG files, with only PNG, where one was w/o alpha, and with combination SVG and PNG. Nothing worked. I sent feedback with attached AppIcon.icon file.