I had the exact same problem. Went thru all steps, web searched solutions etc etc. (apart from deleting bluetooth cache and installing AdGuard).
Spoke to AppleSupport, who went through a few things... finally suggesting I reinstall Monterey.
It worked! NO changes to system or setting. Apparently the original install may have cause a 'glitch'.
So... to do the same, its very simple.
Power off your Mac - power up again while holding 'command' and 'r'.
Hold both keys before you hit power button.
You be taken to recovery mode and given options including 'Reinstall Monterey'.
Choose this - but note - it can take a while, so only do it when you don't need your machine for an hour or so.
Once complete, everything came back online - including all open tabs in browsers etc.
Tested the AirDrop and bingo! It works no issue.
No idea why the first install caused an issue, but it's fine now.