Hi!
Did you setup your project with Background Audio and your audio session to .playback? From the doc for AVPictureInPictureController - https://developer.apple.com/documentation/avkit/avpictureinpicturecontroller:
To participate with Picture in Picture in iOS, take the following steps in your Xcode project: In the Xcode Capabilities view for your project, select Audio and AirPlay in the Background Modes section.
Configure your audio session with an appropriate category, such as playback. Also the video to help you get started with tvOS PiP - https://developer.apple.com/videos/play/wwdc2020/10176/ is up today
Good luck!
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A couple of weeks ago I also filed FB14504563 ([iOS 18 regression] Saving model context on background thread / ModelActor does not update @Query / SwiftUI views)
This is a pretty clear regression and hopefully fixed before iOS 18 ships