Based on what Apple have stated here I would expect UC to function over USB but it is not?
5 - iPad and Mac must not be sharing a mobile data and internet connection. To use over USB, you must trust your Mac on the iPad.
https://www.apple.com/uk/macos/monterey/features/#footnote-5
Is anyone else able to use UC over USB with BT & WiFi off?
All settings and trust process confirmed.