Also had this issue, no grey images. I went through and deleted all the localization images that i added and then added them back. I was able to submit after that.

Will do. Thanks FB11518279 (Xcode crashes when updating existing watch app and extension to a single-target watch app)

Update: After the official release of Xcode 13.0, my builds are working.

Submitted - FB9312664

Update: I have tried a whole lot of things ... without any success. Even took the route of trying to install RVM and libffi directly