How to enable Picture-in-Picture for FaceTime calls on Mac?

On macOS Tahoe 26.5 with FaceTime 36, should minimizing a FaceTime call create a Picture-in-Picture window, or is the call expected to minimize to the Dock?

Ive tried everything, looking the menu bar on FaceTime and going through all of my settings.

[Re-Titled by Moderator]

Original Title: Picture-in-Picture on FaceTime (MacBook)