There appears to be a bug in iPadOS15/16 that impacts markup/cropping of screenshots and Photos. Until the underlying issue is resolved, there is a workaround.
First - save the cropped and/or marked-up image - at which point, when reviewed, the markup appears to have been lost. Saving another screenshot/image will make edits made to the previously saved image visible.
Interestingly, if an initial screenshot is triggered using the corner-swipe gesture with the Pencil, the markup usually saves without needing to trigger a subsequent screenshot. If not already configured, you can configure the corner-swipe as follows:
Settings > General > Gestures >
- Allow Finger Swipe from Corner - set to OFF if you only wish to use the Pencil and not your finger
- Left | Right Corner Swipe - select Screenshot for one, other or both gestures
Now that you have enabled the corner swipe, you can easily capture a screenshot with just your finger or Apple Pencil). Just swipe diagonally from the lower-left or lower-right corner of the screen towards the centre; this will immediately trigger the screenshot.
Anyone that is experiencing the lost markup problem is strongly encouraged to submit a bug report, to Apple, using Apple’s Product Feedback portal:
Feedback - iPad - Apple
Every report submitted counts; until sufficient reports have been received, Apple may not assign resources for the issue(s) to be investigated and corrected.
When submitting a report, be sure to include details of both the iPad model and installed version of iPadOS in the body of the report; do not rely upon the associated pick-list, as this is rarely up to date.