Contacts search issue After update to iOS 27

I am unable to replicate the issue that you describe with iOS 27 and the Contacts Search function.

If your iPhone is not operating as expected, try a forced-restart - as this will often clear an isolated or post-update software issue:

Force restart iPhone - Apple Support

If the problem persists after performing the restart, it may be necessary to reset your iPhone settings. While this reset will not cause any loss of data, as a precaution, it is always wise to ensure that you have a current iCloud or iTunes backup before performing the reset:

How to back up your iPhone, iPad, and iPod touch - Apple Support

When you are happy to proceed, you can perform the reset from iPhone settings:

Settings > General > Transfer or Reset iPhone > Reset > Reset All Settings

If the problem still doesn’t clear, the next step is to reset the iPhone to factory settings:

Restore your iPhone, iPad, or iPod to factory settings - Apple Support

Otherwise, you would be best advised to seek assistance directly from Apple Support. You can contact the Support Team using the Support link at top-right or bottom-left of this page. Alternatively you can initiate and manage your support cases from Apple devices using the excellent Apple Support App. If not already, the App can be downloaded from the App Store:

https://apps.apple.com/app/apple-support/id1130498044

You might also visit the Genius Bar at your local Apple Store or Apple Authorised Service Provider (AASP) - where the technicians will be able to assist with troubleshooting:

Genius Bar Reservation and Apple Support Options - Apple