Mac Camera Continuity - iphone not showing up to select

I have a 2021 14" MBP and an iPhone 12 Pro. They are both running the most recent software versions (12.6 Monterey for MBP, iOS 16.0 for iphone) but for the life of me I can't get the iPhone to show up for use as a webcam on the MBP.

Confirmed items:

• both signed into the same Apple ID
• Multi-factor authentication turned on for the account
• bluetooth and wifi both turned on, on the same Wifi network
• Handoff is enabled on the iphone (Settings > General > Airplay & Handoff settings)
• Continuity Camera is enabled on the iphone (same settings location as handoff)
• Allow Handoff between this Mac and your iCloud devices is checked on the MBP (System Preferences > General)

Strangely, I can use the import Photo or import Scan Document functionality with my iphone on the MBP with no issues.

Specifically if I open something like Photo Booth, Facetime or MS Teams, when I got to the camera selection areas the iphone just doesn't appear (see example image below.

Any suggestions would be greatly appreciated as I would really prefer to use the iphone camera for some minor video work I need to complete for work. The built-in webcam is just too soft for anything beyond basic video conferencing.