What is this blue icon in iPadOS 18?

According to Apple Support Chat:

As per checking with my resources, this icon is an icon indicator that the iPad is on the process of syncing and finalizing the software update. We recommend that you put your device on wifi to ensure that the update completes perfectly.

An excellent question (the second seen in recent weeks) - in particular as Apple have not documented the icon that you illustrate within the iPad User Guide:

Learn the meaning of the iPad status icons - Apple Support

You might be best advised to seek clarification as to the meaning of the unidentified icon directly from Apple Support. You can contact the Support Team using the Support link at top-right or bottom-left of this page.

Alternatively, you can initiate and manage your support cases from Apple devices using the excellent Apple Support App. If not already installed, the App can be downloaded from the App Store:

https://apps.apple.com/app/apple-support/id1130498044

Here's another status icon that you may encounter - also not documented - that will briefly appear when you connect a USB-C hub (or some other USB accessories) to your iPad: