I experienced the same issue. Appearance proxies are part of the UIKit API, so I don't think they are guaranteed to work in SwiftUI. They usually do because SwiftUI tends to wrap UIKit views, but that’s not necessarily the case for all platforms and versions.
As an alternative you can omit the navigationTitle modifier and use a toolbar with an item positioned to .navigationBarLeading, where you can apply any style you want:
.toolbar {
ToolbarItem(placement: .navigationBarLeading) {
Text("Title")
.font(.largeTitle)
.fontDesign(.rounded)
}
}
The result in visionOS 1.1 looks the same as if you were able to style navigationTitle, but keep in mind that's not the case for other platforms like iOS.