layer panel does not display text after converted to shape

[marnie 2]

hello, i hope someone can help me with this, i am new to photoshop 1 month in! i have update 21.2. 

i am following tutorials one in particular ,  how to overlap text by converting the text first into a shape, now this part works fine. The  layer panel shows my orignal text i converted to a shape the problem is   when i have to individually place each letter on its own layer by selecting the layer tab and clicking new then shape layer via cut another layer appears stating its been done but nothing has changed?  i have attached a screenshot if anyone knows how i can fix this. 

p.s i have already toggled the panel options to change the thumbnail size to large and have tried both buttons layer bounds and entire document still doesnt work, also on my photoshop performance preferences i have  legacy compositing clicked.

[JJMack]

"shape layer via cut"  I did not know there was such a Photoshop  feature. Where is Photoshop user interface for this feature. How do you cut a shape. How are layer thumbnails related to your cut shape problem. Adobe broke Legacy composting in the 21.2 update. If you have 21.2 installed do not check that option in your Photoshop preferences.