Unable to type spaces into edit fields on iPhone15 simulator

iPhone 15 simulator somehow preventing spaces from being typed into edit field of app under test.

To also be clear it also happens in other places like the contact list, file search or even search boxes.

I have narrowed down it, to being a space at the end of an edit field!. I can type “monkeymagic” then use keyboard left arrow (a few times) and go back and then insert a space and that seems to work.

If a space is typed, then the next chars that are sent don’t seem to type at all. I can mash the keyboard and text does start to get typed.

Any idea what could be causing this?

Edit:

I have tried with iPhone14 simulator and its still the same issue.
This is using iOS 17.2 on a M2 laptop.