I ran across similar issues. In my case I'm hitting the Guardrail Violation for prompts over (roughly) 4000 characters. Under that, I'm fine. Innocuous prompt. Also filed FB18809149. I wondered if it might be a false exceedsContextWindowSize error, but with comments above, maybe not.

When all else fails, reboot. When that fails, reboot the next morning. After the morning reboot the "installed" simulators were all gone from the list and I was able to reinstall them. All good now.

This is what I get when attempting to delete any Simulator. This happens to be watchOS 10.2, but I tried with the other watchOS versions, VisionOS, and others.

I was having this issue late yesterday (US Eastern time). Two apps that share a distribution certificate. As of 30 minutes ago (8:30am) both apps are installing fine; same builds that failed yesterday. I hope this means Apple has fixed builds at their end, similar to the March issue.

I'm a dunce: When copying code from the dummy app, I didn't add the SelectionIntentHandling protocol to the class. Added and all is good.