I am having the exact same problem. Brand new iPhone 14 Pro. iOS 17.1.2.
One temporary work around: Go within desired app and insert the desired photo, etc. from there.
For example, go into Messages app, select the plus in the lower left corner and select desire photo.
Or from within the Mail app, tap in the email body, and hit the right carrot and scroll to "Insert Photo or Video", etc.
Hope they come up with a true fix soon, but hopefully this will help you get by until then.
BTW, anyone else having trouble with long text messages? I try to place cursor to a point high in the text. My phone puts the cursor there, but then jumps to the bottom of the message so I can't see or use the cursor point I just selected. I can start typing and it will jump to where the cursor is, but many times I want to do something other than type once I place the cursor there. (Feel free to start this in a new thread if that is more appropriate).