Also seeing this since upgrading to Xcode 16.4. Previously, it was working.

It appears that content.js won't be injected into web pages that you have not given permission for. I am noticing that on iOS and macOS I have to go searching for a tiny yellow caution icon when permissions are set to 'Ask'. Selecting this caution icon, an alert-like box pops up asking to give permission for one day or permanently. I could not find the injected scripts in the debugging tools Sources, until after I gave permission. Then mysteriously, the extension started working again.

Try changing the folder name in the Project Navigator (greyed left area) to "images" (all lowercase). It looks like the first first letter is a capital.