This worked for me too! After that, “Add Package > Add Local…” started working. Before this, I could only add the local package via drag & drop; otherwise I got ‘Package Resolution Failed: unexpectedly did not find the new dependency in the package graph.’

Great! 👍

In continuation of the post. In March 21, 2022 a decision was made to resubmit the app but unfortunately without avail. According to the App Store support: "Rejecting and resubmitting your app again will start the review process over, and will not expedite your app’s review".