I did some more experimentation. After rebuilding photos library, disk first aid and even Oynx on the system, was still having problems. But I found it was working on some earlier pictures - but not all.
The current photos it was not working on were shot with a Nikon in raw (NEF). I tried running them through Pixelmator Pro for color correction (indoor hockey lighting) from within Photos. It seems to be working now with the results of that output within Photos.
I thought I had used it before on Nikon raw images but can't guarantee that.
I also tried just editing with the built in Photos capabilities and that did not fix it. But again, once I ran it through Pixelmator Pro from within Photos, Clean Up works as expected.
A few more experiments:
- edited with Affiniti Photo 2 within Photos also makes it work
- tested on a photo shot from an iphone (heic) - worked OK
- tested on an older Nikon raw photo - not only did it not erase the item but it corrupted some other part
My conclusion from the above is that, while the other Photo tools work fine with the Nikon raw (NEF) format, the clean up tool seems to have problems with it. But a work around is to send the image through an external editor from within Photos that returns it as something other than a NEF raw file.
If this is correct, it would be great if Apple could either support the raw formats (possibly others have problems?) or spell out clearly the limits and list this type of work around.
Note that when Clean Up does work it is often amazing.