iPad folio keyboard not working with iPad native Notes app

After upgrading to iOS 18 on my iPad Air 4th gen (MYFQ2LL/A), I opened the Notes app and clicked on New Note. I started to type out the title on my Apple folio keyboard and that worked as usual. But when I hit Return, instead of dropping down one line in the Note, focus moved to the left menu bar where all my previous notes are listed, highlighting the first note in the list. Subsequent Returns did nothing. I could use the keyboard’s arrow keys to move up or down the list of notes, but that’s it.

Detaching the folio keyboard surfaced the iPad’s touchscreen keyboard which worked in the new note as expected.

I tried this multiple times and each time it behaved the same way.

Anyone else experiencing this? (I’m typing this on the same setup and it works fine).