I updated to macOS 26.5 and Xcode 26.5 and the issue seems resolved. However, after a reboot I do have to start Xcode and wait for up to 10 minutes before the "status unavailable" message goes away and the simulators are available.

Submitted bug number is FB14992043

Figured it out. Switched to a List instead of VStack and glass effect appears on drag. struct GlassDragView: View { @State private var items: [String] = ["Item 1", "Item 2"] var body: some View { List { ForEach(items, id: \.self) { item in ZStack { RoundedRectangle(cornerRadius: 8) .foregroundColor(.clear) .frame(width: 200, height: 100) Text(item) .padding() .background(.gray) .cornerRadius(8) } .onDrag { return NSItemProvider(object: item as NSString) } } } .frame(width: 600, height: 400) .background(.gray) } }