With this new update 16.3.1

Yes. Prior to iOS 16, iPhone users with live wallpapers set had to hold the Lock Screen to make the live wallpaper animate. That was changed in iOS 16 with the removal of live wallpapers. In iOS 16, if you hold the Lock Screen, it directs to custom Lock Screen interface. So in iOS 16, Apple quietly removed the live wallpaper feature.

See this video link below explaining why Apple removed Live Wallpapers:

https://www.youtube.com/watch?v=bx27zaXiJq8

Ahyraishe ~ As an alternative, Apple's new Live Weather wallpaper for the Lock Screen & Home Screen(s) is worth trying. It will display a background image of the current weather in your location – so a dynamically changing sunny, cloudy, or rainy, etc. "sky". The screenshots below of my Home Screen show only a small sample of the possibilities – at sunrise, mid-morning and night:

Open Settings > Tap Wallpaper > Tap “+Add New Wallpaper” > Tap blue Weather icon at top right > Tap "Add" at top right > Tap "Set as a Wallpaper Pair" > Swipe up from the bottom to finish.

Also check these:

Settings > Privacy & Security > Location Services > Location Services = ON

...Then scroll down to Weather, tap it and:

Always = Checked

Precise Location = ON

Change the wallpaper on your iPhone - Apple Support

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