I don't understand how Universal Control works.

My guess is that you need to go into the Advanced… dialog on both of the computers, and turn on "“Allow your pointer and keyboard to move between any nearby Mac or iPad" on both of the computers, before the Displays Settings screens will change to show the two screens and let you tell the Macs about the physical arrangement.

Universal Control is just keyboard and mouse. It has nothing to do with display sharing. You can control two Macs with the single set of keyboard/mouse/trackpad.

iOS and macOS can use Sidecar to use an iPad as an extended display.

Universal Control: Use a single keyboard and mouse between Mac and iPad - Apple Support

Use an iPad as a second display for a Mac - Apple Support

eryuga wrote:

"Until you confirm that you have connected to the other Mac, it won't have any chance of seeing it in the arrangement section."

How do I confirm this if inside the "Display > Organize Multiple Displays" section of my iMac I can't find my Macbook? I am able to see it just if I press on "+" and there I see "Extend to Macbook Air Display using AirPlay".

Exactly as it says in the instructions. Move your cursor to the side of the display and you will see it bump into the other display. Continue moving the cursor until you have moved it onto the other Mac’s display. None of that has anything to do with the Displays system preferences.

As I stated, Universal Control has nothing to do with displays.

It doesn't matter how many times you say it, you have to follow the instructions to enable Universal Control.

Did you do what it says in the "Connect Your Devices" section? Once that is complete, you can then see the other Mac display and Arrange them.

If you cannot connect them, make sure all of the Additional Requirements are met.

eryuga wrote:

Okay, we have a problem. Where did I talk about Display and Display extension? I am not interested in using my Macbook screen as a second display. I am interested in the Universal Control feature to use my iMac's keyboard and mouse on my Macbook. Is this possible or not?

I have read every guide I can and have done everything corectly, or at least I think so. I have all the requirements but I still don't see my Macbook screen inside my iMac when I go to "Arrange Display"

I pointed out the part of the instructions necessary to see your other Mac in the Displays System Preferences. Until you confirm that you have connected to the other Mac, it won't have any chance in **** of seeing it in the arrangement section.

We have no ability to see what you have done or what the result. You have to positively confirm the step where the process failed, not "I have followed all of the instructions."

eryuga wrote:

Eheh. Thanks anyway, your help was extraordinarily useful. Really. And of course, I will contact Apple Support. Everyone knows Apple Support is the best Support ever.

You can act like a turd, or you can contact the people that might actually be able to talk to the software engineers, and fix the problem that you are experiencing. It’s obviously broken, for you anyway, and probably others. All of us users don’t have any ability to fix the code that’s broken.

"Where did I talk about Display and Display extension/"

Then why are you posting a display screenshot?

Then, if you’ve checked all of the requirements and you meet all of those, you should contact Apple support, there’s nothing we can do about it.