I had a somewhat different but similar issue when building on M1 MBP with Xcode running with Rosetta. Some of Apple's APIs failed and together with failing there is this error printed to the console. In my opinion this is some kind of a simulator bug and it is present as of Xcode 12.3. Maybe 12.4 solves it, but I did not try. Anyway, what solved it for me was to download iOS 13.7 simulator runtime and create a new simulator with this iOS version.

While not using XPC, The code in the following repo - https://github.com/johnboiles/obs-mac-virtualcam demonstrates how to communicate between a DAL plugin and a user space application. The code uses Foundation's distributed objects - https://developer.apple.com/documentation/foundation/object_runtime/distributed_objects_support?language=objc and it is very straightforward and easy to understand. Edit: Oh, I missed the part which says that distributed objects is deprecated :(