It's a sporadic issue for me. But restarting the iPhone and freshly connecting it to my Mac does resolve the problem reliably! I'm running many days without rebooting my iPhone and I suppose there are some "debugging/development related" iOS processes which "get stuck" after such a long time... Or perhaps it is somehow related to not having properly disconnected the devices during as debugging session? I have no idea. It just happens and I don't know why.

The problem still appears in macOS Monterey beta 6. You cannot handle double-click without loosing/breaking the built-in List functionality. I filed a feedback too: FB9595044. The issue with the gesture handler in the listRowBackground() is that it strangely resizes the items when they are moved. I haven't found a workaround for that either... but at least this bug has been fixed in macOS Monterey.

Just to let everybody know who stumble over your example: it does work perfectly fine. (I was looking for an example and found yours :-))