iOS 18.1, iPhone 14, Capacities v1.43.1. I have a handwritten notebook that I use and I capture images from it to insert into my daily note in Capacities. I use Microsoft Lens on the iPhone to "scan" the notebook page, then tap through to the iOS share sheet and send the image to Capacities. Sometime recently this stopped working, I still get the "upload" tab at the bottom of the screen in Capacities in iOS as a target but when I tap upload I just get a spinner in the upper left corner. After 30 seconds or so it says "this image format is not supported."

I found a workaround, instead of tapping "Capacities" in the share sheet, I can "copy" the image to the iOS clipboard and paste into my daily note. This is almost as convenient, and seems to indicate that the issue is not a malformed image.