Sequoia - iPhone Mirroring - Connection Interrupted

Hi, I updated my M2 Air yesterday to MAC OS 15 and iPhone to IOS 18. I worked with the iPhone mirroring for a full day with no issues, and it worked perfectly. Today, I tried to initiate the connection again; I can see that the iPhone is connecting. I can even interact with the iPhone's mirrored screen for 1-2 seconds. Then it immediately prompts me with the error "iPhone mirroring Connection Interrupted Ensure "iPhone* is near your Mac, powered on, with Bluetooth and Wi-Fi enabled."

I tried turning off sidecar, restarting the computer, removing the devices from the mirror settings on both ends, and even trying to log out of iCloud and restart the devices. Nothing seems to solve it, and all the articles I found refer to issues where the iPhone is not mirroring at all; while my situation is different, I can mirror it for about two seconds.

Does anyone have any idea how I can resolve this issue?