I have been having this issue on the M1 as well. I've deleted all of my simulators and re-created them, I've renamed my Xcode (I have four versions installed) back to the default name, etc. Nothing allows me to sync my clipboard from macOS to the simulator. The paste menu items are disabled.

Hopefully Apple will hash it out quickly

We are seeing this issue also

As Taylor mentioned, we have the package set up. It works in DEBUG, but not in RELEASE. It works in RELEASE if we disable MERGABLE LIBRARIES. So the question is: What is the best way to handle mergable libraries?