Can’t mention people on iMessage after iOS 16 upgrade

I have the iPhone 13 Pro. I was running iOS 15.7 and always I was able to mention people in iMessage, both in group chats and single conversations. I was just typing the person’s name exactly as I have stored it in my contacts and it was showing the contact on top of the name to mention the person.

After installing iOS 16, this just isn’t working. No matter how I will type the person’s name, it isn’t showing the contact to mention. I tried a restart, tried disabling and re enabling iMessage, and of course I have tried in different conversations and with different people.

I have managed it to work only the exact moment when someone else is sending a message. That time, if I type a person’s name, it shows the contact on top of it to mention. So of course its a bug.

My girlfriend also has the same problem with her iPhone 12 Mini.

Any ideas??