Greyed-out FaceTime option for incoming calls on iPhone 16

Have an IPhone 16 running IOS 18.1.1

Have FaceTime turned on.

I can make FaceTime calls and everything is fine.

But when friends or family try to call me they do not see the FaceTime option, they see a greyed out “Video” button where the FaceTime button should be.

And yes these are people with IPhones. Like I said I can call them on FaceTime with no problem!

What am I missing in settings?

[Re-Titled by Moderator]