Same issue here. MacBook Pro M1 Max.

I am having the same issue with iPhone 14 for some reason. I filed a bug report (FB11806564) and I also posted a similar question here before finding this thread.

Have you enable the Nearby Interaction background mode in target mode settings?

I filed a DTS and the reply was that the direction is not supported in iPhone 14. For direction information the camera assistance feature needs to be used (backed by AR). My guess is that it is not a bug. They chose to remove it.

Same issue here with Xcode 15.3