App arrangement.

You can use the list view for alphabetical order as explained in Open apps on Apple Watch - Apple Support

"Display your apps on a grid or in a list

The Home Screen can display apps in a grid or list view. To choose one, follow these steps:

1. Open the Settings app  on your Apple Watch.
2. Tap App View, then tap Grid View or List View.

You can also open the Apple Watch app on your iPhone, tap My Watch, tap App View, then tap Grid View or List View."

Schrodinger56 wrote:

So this will change the order of the app icons on my (new) iPhone 12 to one where they're arranged alphabetically?

Thanks

No, the arrangement only applies to the Apps on your Apple Watch.