This is what I see in iOS 27.0.1 on a 16 when I hold the phone vertically:

As Mac Jim ID showed, this is what I see when I hold it horizontally:

As you can see, I get the Add Text choice, but in fact I can't scroll the menu. I'm not sure why you only get 4 choices (perhaps you have larger text size,) but the problem is the lack of scrolling.
It sure seems like you're zoomed in, doesn't it? That would explain your getting only two choices. Do you have all the accessibility options turned off?
Also, Settings>Appearance has some text size settings and "Display Zoom"
Have you tried a forced restart?
Force restart iPhone - Apple Support
This is different from a simple Power Off. For me, the logo appears 5 or 10 seconds past the "slide to power off" message. Wait for the logo; don't do the slide thing.
My inability to scroll through the menu is weird
If this is a problem for both of us, we should report it here:
Feedback - Photos - Apple
Let us know what you find…