AirDrop contact not receiving anything but sending to Other people works

Trying to AirDrop something to my Wife (known contact that shows up in People, or directly in the share menu) does not work. She doesn't receive a request to approve or anything.

But her phone is also showing up in Other people section and when I try to AirDrop there, it works. Also, when I AirDrop to my Mac, it works.

PS: We have also tried AirDrop the other way around and when she tries to send me something and I don't receive the request.

She's on a iPhone 12 Pro Max with iOS 16 and I'm on a iPhone 14 Pro with 16.0.1

We have tried rebooting phones, turning off and on Bluetooth, AirDrop, Wi-Fi, etc.