Working example of using PhotosPicker in a SwiftUI application (verified on Xcode 14 Beta 2 and iOS 16 simulator)

CircularProfileImage.swift

import SwiftUI

struct CircularProfileImage: View {
    let imageState: ProfileModel.ImageState

    var body: some View {
        ProfileImage(imageState: imageState)
            .frame(width: 100, height: 100)
            .clipShape(Circle())
            .background {
                Circle().fill(
                    LinearGradient(colors: [.yellow, .orange], startPoint: .top, endPoint: .bottom)
                )
            }
    }
}

ContentView.swift

import SwiftUI

struct ContentView: View {
    @State var viewModel: ProfileModel = .init()
    var body: some View {
        EditableCircularProfileImage(viewModel: viewModel)
    }
}

EditableCircularProfileImage.swift

import PhotosUI
import SwiftUI

struct EditableCircularProfileImage: View {
    @ObservedObject var viewModel: ProfileModel

    var body: some View {
        CircularProfileImage(imageState: viewModel.imageState)
            .overlay(alignment: .bottomTrailing) {
                PhotosPicker(selection: $viewModel.imageSelection, matching: .images, photoLibrary: .shared()) {
                    Image(systemName: "pencil.circle.fill")
                        .symbolRenderingMode(.multicolor)
                        .font(.system(size: 30))
                        .foregroundColor(.accentColor)
                }
            }
            .buttonStyle(.borderless)
    }
}

MyPhotoApp.swift

import SwiftUI

@main
struct MyPhotoAppApp: App {
    var body: some Scene {
        WindowGroup {
            ContentView()
        }
    }
}

ProfileImage.swift

import SwiftUI

struct ProfileImage: View {
    let imageState: ProfileModel.ImageState
    var body: some View {
        switch imageState {
        case .empty:
            Image(systemName: "person.fill")
                .font(.system(size: 40))
                .foregroundColor(.white)
        case .loading:
            ProgressView()
        case let .success(image):
            image.resizable().scaledToFit()
        case .failure:
            Image(systemName: "exclamationmark.triangle.fill")
                .font(.system(size: 40))
                .foregroundColor(.white)
        }
    }
}

ProfileModel-Data.swift

import PhotosUI
import SwiftUI

class ProfileModel: ObservableObject {
    enum ImageState {
        case empty, loading(Progress), success(Image), failure(Error)
    }

    @Published private(set) var imageState: ImageState = .empty

    @Published var imageSelection: PhotosPickerItem? {
        didSet {
            if let imageSelection {
                let progress = loadTransferable(from: imageSelection)
                imageState = .loading(progress)
            } else {
                imageState = .empty
            }
        }
    }

    private func loadTransferable(from imageSelection: PhotosPickerItem) -> Progress {
        return imageSelection.loadTransferable(type: Data.self) { result in
            DispatchQueue.main.async {
                guard imageSelection == self.imageSelection else { return }
                switch result {
                case let .success(data?):
                    guard let uiImage = UIImage(data: data) else {
                        self.imageState = .empty
                        return
                    }
                    self.imageState = .success(Image(uiImage: uiImage))
                case .success(.none):
                    self.imageState = .empty
                case let .failure(error):
                    self.imageState = .failure(error)
                }
            }
        }
    }
}