I believe you are posting in the wrong forum. Xcode Cloud is about not building on your local machine, but instead in the cloud.
You are having issues with the Xcode uploading tool, AppStore Connect and/or TestFlight.
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We experienced the same issue with sonar scanner. We fixed it by adding brew install --build-from-source python@3.12, which seems to work, but I am not happy with this solution, because it adds a few more minutes to the build duration and could break again in the future. I would prefer if Xcode Cloud had the command line tools preinstalled or some other solution...
It was fixed in iOS 17.1. I am not aware of workarounds for earlier iOS 17 versions.
I've talked to Apple. The bug is now considered serious and there is no workaround for it.
Also small addition: It just affects iOS not iPadOS.
https://developer.apple.com/documentation/pencilkit/drawing_with_pencilkit
This example project from Apple has the exact same issue!
So I assume we will have to wait until Apple fixes it.
Maybe I am totally wrong here, but it looks light the color got converted to dark mode. You can specify the user interface style when drawing the UIImage. I hope this helps.
PencilKit supports switching between dark and light mode. If you are in dark mode PencilKit assumes a black canvas and converts your black strokes to white ones, so you can see them again. If you switch to light mode all of your strokes will be black again.