I have the same issue. I have a 2017 27" iMac Retina running Big Sur 11.5. I have a 21inch iMac 2011 running !0.13.6.
Apple Thunderbolt cable to a Thunderbolt to USB-C adapter. Trying to use my 21.5 inch mac as a second display and it is not working. This is very Frustrating as my wife needs the second display to do work. When are they going to fix this.
This is crazy. Apple Needs to fix this right away.