It is still possible to add circle and rectangular outlines to images in the Photos app on iOS using the Markup feature.
Tap Edit, then tap the pen icon in the top right to begin Markup. Tap the “+” button on the right side of the tool selector, then tap “Add Shape” to select and insert a shape. You can then edit the shape, including its fill color, at the bottom of your screen. Make the fill color transparent to turn the shape into an outline.
The faster way to add an outline shape to your image is to use any of the drawing tools to draw a circle or square around something in the photo. Once you’ve drawn the circle or square, keep your finger or Apple Pencil on the screen; your drawing should automatically be converted into the shape it determined you were trying to draw.
For help with Markup on Mac, see the following support article: Use Markup to write or draw on a photo in Photos on Mac - Apple Support