I hope they will fix it. This is clearly a bug, since it just stopped working without any obvious reason.
Hardly to understand how such a straight forward function can be so buggy.
I have the same issue. It worked really well for 3 Days with my iPhone 15 pro. Until it stopped going into standby at all. My device is not in Low Power mode, nor was the feature disabled.
After fiddling around quite a while, I was able to get it into this mode exactly one more time while having it connected to a cable, and moving and shaking it - but that has not been reproducible. So clearly a bug that prevents the phone from going into this mode, or having issues detecting the location.
This is just a wild guess, but I noticed the bug first after using "Focus Screens", adding the "Mars" Home Theme for the first time. And I also installed all the apps I need - nothing crazy, but a bit pro user stuff like "Actions" etc.
So it could be either a totally non-related bug, or have something to-do with other apps, or the Focus Modes.