After removing the background of a photo, can not send it as a sticker

When I drag the isolated subject in a picture and drop it in a msg, instead of sending as a sticker, it sends a photo with just plain white background. I have the latest ios 16.3.1 installed to my phone, tried to reset my settings, restart, etc. Still not working... and funny enough, one of my friends have the same phone with me but his photos are sent as stickers!!! Going crazy!!! Please help.

Thank you