IOS26 “This iPhone encountered an issue while starting“ screen problem

I have a fix for this same thing happened to me on my Iphone 16 pro max, here are the steps I had to do:

1. Needed to use a laptop to connect my iphone to but i had the problem that bc my phone was stuck in recovery mode my computer wouldnt recognize it, the fix for that is plug your iphone into your computer and do the hard restart (up, down, hold right button) but instead of letting go when the apple logo comes up hold the right button until it changes into computer recovery mode (black screen with a computer and cable logo) which then lets your computer discover it
2. If update doesnt work do the restore (no problem if you know you have your phone backing up) but when that is done the important step I havent seen mentioned yet that made it work for me is to select the option to set it up as a new phone vs from a backup, this is the only way I could get mine out of the recovery loop (still use your apple id email for signing in)
3. Setting up as a new iphone isnt an all is lost thing, you do lose your wallpaper and any personalization settings like your home screen setup and any apps you had downloaded but you can easily see all previously installed apps thru the app store and re-install all (in my case skipping a bunch I no longer use)

figured I'd post a reply saying what worked for me in case anyone else has same problem :)