It does seem as though its related to the hardware of older iMac models. I have a 2019 iMac with 8GB RAM and i5 processor with a Radeon 570X Pro. Still, my spec as well as your own i7 with 16GB RAM feels like it should be more than powerful enough to run an iPhone simulation. These machines are capable of far more resource intensive tasks.

thank you for the input, I believe this machine has only 8gb RAM which I guess could be causing the problem. I have tested on XCode 13.3 beta and the issue is still present, I have submitted another reply to feedback FB9843208 containing another diagnostics. The strange thing is that post-installing-Monterrey I was still able to use Xcode just fine for a while (although previews were a little bit on the laggier side) and then it randomly one day decided to stop working and I also experience the system wide lag that you speak of when XCode is running.

FB9843208 is the feedback ID

Submitted a feedback report about 12 days ago now and have heard nothing in return, still broken for me after several reinstallations and hours of attempts at fixing it.

I have made the .zip but it is over 400mb and I cannot upload it here - would it be fine for me to upload it elsewhere such as Google Drive or Mega? My previews have now stopped working entirely and I'm getting this error message in the 'diagnostics' window: MessageSendFailure: Message send failure for relaunch ================================== | HumanReadableNSError: Error launching Xcode Previews |   | com.apple.dt.xcodepreviews.service (0): |   | ================================== |   | | HumanReadableNSError: failed to launch preview shell: Error Domain=FBSOpenApplicationServiceErrorDomain Code=1 "The request to open "com.apple.dt.XcodePreviews" failed." UserInfo={NSLocalizedFailureReason=The request was denied by service delegate (SBMainWorkspace) for reason: Locked ("Unable to launch com.apple.dt.XcodePreviews foreground because the device is locked. see FBSOpenApplicationOptions.h for ways to do this")., BSErrorCodeDescription=RequestDenied, NSUnderlyingError=0x600000559fe0 {Error Domain=FBSOpenApplicationErrorDomain Code=7 "Unable to launch com.apple.dt.XcodePreviews foreground because the device is locked. see FBSOpenApplicationOptions.h for ways to do this." UserInfo={BSErrorCodeDescription=Locked, NSLocalizedFailureReason=Unable to launch com.apple.dt.XcodePreviews foreground because the device is locked. see FBSOpenApplicationOptions.h for ways to do this.}}, FBSOpenApplicationRequestID=0xd94e, NSLocalizedDescription=The request to open "com.apple.dt.XcodePreviews" failed.} | |   | | com.apple.dt.xcodepreviews.service (0):