iPhone 12 blocks incoming calls

My iPhone XR is doing this. The call shows as incoming and then immediately shows rejected and missed. It sends my caller to voicemail. The callers are in my contacts. I don’t have Do not disturb on, or call forwarding. I turned my phone off and it rang to my Apple Watch just like normal

If you are not receiving calls from people that are not in your contacts, then go to Settings>Phone>Silence Unknown Callers and turn that Off. If you are not receiving any calls at all, you need to check Call Forwarding, Do Not Disturb, and other Focus settings. The next check after that would be your carrier. Are you seeing the calls appear in Recents, so that you see you received a call? Are they going to Voicemail?

Do the calls show up as missed calls in your Recents Call tab? One step that you can use to help reset communications with your carrier is to reset your Network Settings. That will not have any affect on your data, but it will reset your wi-fi passwords. Go to Settings>General>Transfer or Reset iPhone>Reset>Reset Network Settings. Then power the iPhone off and back on again. Have someone try a phone call to your iPhone and see what happens. If it still drops as you described before, contact your carrier, explain the problem to them and see what they can do. It would almost seem they have some type of conditional forwarding setup.