Via Warren Moore, a solution that worked for me: I’ve found that I’ve had to repeatedly use that xcodebuild incantation (after every reboot) and also mount the resulting .dmg file (which you can do by calling open path/to/downloaded/Package.dmg from the command line after the download finishes). Then Xcode seems to be able to find it.

Tried everything in this thread multiple times, the corrected command just fixes command line builds while building from Xcode still gives "error: cannot execute tool 'metal' due to missing Metal Toolchain"

Still happening in iOS 17.4.1, FB13759599