This issue has now been fixed by Apple on iPad OS 16.2 Beta 1. The public release for iPad OS 16.2 is aimed to be in the next 4-5 weeks. It is also recommended to continue testing future beta releases for any potential other bugs.

I have reached out to Apple and currently have an active case on this issue with their engineering team. Apple has acknowledged the problem and its development team is working on this. Not confirmed officially but a probability that a fix may be introduced on iOS 16.1 or earlier versions of 16.x. So being recommended that Beta testing on iOS 16 is frequently carried out.