My iPhone 16 promax cannot connect to airtag after iOS 26 update

After updating to iOS 26, I tried to use FindMy to find the AirTag I have attached to my car keys. FindMy reported the AirTag as “With You”, but I could not use the Locate function nor Play Sound. My wife and I both have an iPhone 16 Pro Max, and I was able to share the AirTag access with her and her phone had all the functionality with the AirTag allowing me to use the Locate and Play Sound functions. She had not applied the iOS 26 update.

Things I have tried to resolve the issue:

-Rebooting

-Resetting the AirTag

-Removing AirTag from my account, resetting the AirTag, and add it as new

-factory reset location on iPhone

-changed battery in AirTag

My iPhone will recognize the AirTag is nearby, but will not connect to it. I get Cannot connect to AirTag. Please try again later. I also have two pairs or AirPod Gen 3 that were unaffected by the update and connect as they should.