Thanks for this detailed description. I don't have Photoshop, but I was able to follow these directions in Figma with my free account.

Thank you. This worked for me as well. Prior to this, I tried unpairing/pairing my phone multiple times, restarting MacBook and iPhone multiple times. I even deleted Xcode and re-downloaded it. But it was the 16.1 beta 2 version that miraculously fixed it.