I had this issue when I installed the first public beta. They were wallpapers I've used since God knows when so not made on iOS 16. I tried adding new wallpapers and had the same issue. Rebooted and it worked fine for a bit then everything disappeared again. Got frustrated after a few days of trying to fix things and gave it up to God and haven't had a problem with it since.
In conclusion, I'm pretty sure God didn't fix my wallpapers and I don't think any one magic solution will take care of everyone's; but I do wish you all good luck!