Hey there AirPodsSpatial,
Thanks for reaching out to Apple Support Communities. Are you on the latest version of iOS which is iOS 15.1? If not, back up and update then test again.
It looks like you’ve already reset your AIrPods. Make sure you restart your iPhone as well:
Restart your iPhone
Review the following article to ensure you’re setting this up correctly:
Listen with spatial audio for AirPods and Beats
Go to Settings > Accessibility > Audio/Visual and see if Headphone Accommodations or Mono Audio are enabled.
Test with a different iOS device if possible.
We hope this helps. Take care.