To answer my own question, the problem was because a long time ago, I had specified a custom location for my build folder for reasons I won't get into but it was necessary in old version of Xcode and its legacy build system. In addition, some of the third party frameworks I use also had custom build folder locations. Once I changed all the projects to just let Xcode handle maintaining the build folder and ensuring that my Xcode project settings was showing that it was using the Xcode Default build location and not Legacy, the rebuild problem went away.

I have the same problem with versions of Xcode 12.5.1 to 14.0. At least Xcode 125.1 puts out a useful error. Xcode 13 and newer puts out the very unhelpful error message "Required kernel recording resources are in use by another document.". I was able to get around the issue by editing my target's scheme and temporarily changing the Profile > Build Configuration from Release to Debug.

Figured out my problem. I needed to use openjdk 13 to use as a boot jdk. However, there's a bug in src/java.base/macosx/native/libjli/javamdmacosx.m. On arm64, libjli.dylib looks for the directory "zero" but what's built is actually "server".

Did you get anywhere with this? I've tried to build and get an macosx-aarch64-zero-release directory but there are no libs or executables. I had to grab openjdk 14 from brew to use as a boot jdk.