Photoshop now refuses to accept clipboard data from Illustrator.

So now this is the new normal, and there is SO MUCH GOING WRONG that I can’t even describe how livid I am, that users are paying 80€ for a pack of apps that with each release get more and more unstable and unable to function properly at the most basic levels.
For some reason, Photoshop is not accepting clipboard data coming from AI. Not as pixels. not as Smart Object, nothing.
Having the layer as Smart Object is obviously fundamental for later edits.
Using the latest PS version, on a M4 Imac running Tahoe 26.5.1.

Illustrator is also behaving POORLY, but thats a matter for another report.