I have the same issue. Extension builds successfully, appears under "Extensions". Allow unsigned is checked. Extension does not appear in toolbar and doesn't show up under Web Extension Background Content. All of this works fine when extension is built using XCode 15. Interestingly, the same build can be archived in XCode 16 and then added to TestFlight where the TestFlight builds will work as expected.

Since the engineer above has acknowledged that this behavior isn't intentional, is there a link to track if this issue is being resolved before iOS 18 public release? Thank you!

Also seeing the same issue. Extension that works in iOS 17 simulator hits the same storage limit issue in iOS 18 beta despite unlimitedStorage permission

Also saw similar issues where background script becomes unresponsive and can't even input any expressions. While debugging, script will become responsive again only after close/reopen of background script debugger. Curious if you're using sendNativeMessage()? For me, some changes to that method (or removing it) fixed my particular flow and bg script stopped becoming unresponsive.

luxu/swaminathanv, did you guys ever find working solution? I'm now trying on manifest 3 and trying this approach with host_permissions without success.