To resolve the same error I had to wrap all Live Activity related code with #if !targetEnvironment(macCatalyst) ... #endif

Same issue on latest iOS 17 beta. Submitted FB12773661.

iOS (16/17) and macCatalyst, same behaviour in each case.

Is there any change to this with watchOS 8?

Do you have Multicast Networking Entitlement added to your app? Can be requested via https://developer.apple.com/contact/request/networking-multicast

I am experiencing the same with my TestFlight build, was there any solution to this?

Yup, same here.