This is what worked for me:
After updating your phone to iOS16, getting to the home screen and accessing Settings without being able to swipe might be challenging, as you have to somehow skip the "Welcome" screen - try Apple's hard reset by clicking volume up, volume down and pressing the side (power) button until the phone turns off and you see the Apple logo. If it didn't help, connect the phone to your laptop (cable connection) and try again. Try turning off and on 2-3 times with or without cable.
If you were able to skip the "Welcome" screen, the next step is to unlock the screen - since swipe up isn't working, pretend you are turning your phone off by pressing the volume up + side (power) button at the same time. When you see the turn off option, click "cancel" and you should see the PIN screen now. After providing your PIN number you should be able to access your phone.
Go to Settings/Accessibility/Touch/Touch Accommodations - Turn "Touch Accommodations" on. "Tap Assistance" is Off - select "Use Initial Touch Location". Turn "Swipe Gestures" on. Required movement "2x" (try other options 4x, 6x, 8x or standard - 2x works best w my phone).
Your phone should start reacting to swipe. It might be not as smooth as with default iOS15 settings, but should be pretty close, and now you can play around with other settings. Also you might need to restart from time to time. Let's hope this gets fixed with the new update release. Let me know what works best for you.