I was facing this issue on an M2 Macbook Air, every build would open the simulator the first time, but on a second run it would hang on a black screen during “Launching app.” It turns out the “fix” was to disable “Open using Rosetta” (Applications > Xcode > Right click > Get Info) which I had turned on because of a third party dependency in a work project that didn’t create a proper universal binary, which broke using the simulator on M1.
I think people updating to the new version are installing separately, which has the same effect of disabling the rosetta setting if they were using it already.