I have the exact same problem running the same code which has been in the production for years and has been working perfectly for Android. Just installed iOS 16.4 (not beta!) on my physical iPhone 13 Pro.
I even get back "denied" in a situation where I see my PWA application under Settings having notifications allowed/enabled. It just seems that it doesn't matter if permissions are granted or not - result will be still "denied".
Update: Even after getting "denied" from Notification.requestPermission I can still subscribe to Push Notifications and receive those notifications so the problem seems to be only with the wrong result from Notification.requestPermission.