iPhone as Mac webcam (Continuity Camera) not working

Some progress. Apparently the MacOS Ventura 13.01 firewall, is where the problem occurs.

If I turn the Mac's firewall off, using my iPhone SE gen 3 works as a webcam; with the firewall on, it doesn't.

... A problem which I anticipate will also appear when using other iPhones (besides my iPhone SE gen3) running iOS 16.1 or iOS 16.1.1. If you have your MacOS firewall turned on.

I discovered this issue after doing a *lot* of troubleshooting. With no joy until I remembered that back when Universal Control first came out post-beta and I had problems using it when the Mac firewall was on. Turns out that there was a problem with connections being blocked by default by the macOS Monterey firewall.

[As of Ventura and later releases of Monterey, the Universal Control connection is now allowed in the Mac firewall by default. Specifically, in Ventura's System Settings -> Network -> Firewall -> Options, look for what is now called the "Universal Control.app" option. Set to which needs allow incoming connections and Universal Control between the Mac and another Mac or iPad will work; set to block it will block Universal Control whenever the Mac firewall is turned on. The original issue, in macOS Monterey involved the setting for rapportd as well, and I don't know whether that still needs to be turned on too.]

What I don't yet know is which setting (or possibly settings plural) in the MacOS Ventura firewall might need to be changed to allow Continuity Camera using an iPhone for a webcam to work. Checking that now before calling Apple Support ...

FYI, the built-in MacBook Pro camera is working just fine with the three apps I've mentioned (although I have to select it manually; automatic camera selection, always seems to prefer the iPhone camera).

Also, all the other, usual Continuity Camera features seem to work:

I can use the iPhone SE as a camera, and take pictures to insert into documents in apps running on the Mac.

I can scan documents with the iPhone SE to insert into apps running on the Mac.

... And yes, I realize that the Continuity Camera system requirements for these features are similar to, but different than the Continuity Camera requirements for using an iPhone camera as a webcam for a Mac.

Correction:

"... and I see the orange video privacy indicator at the iPhone's forward-facing camera."

I do not see the video privacy indicator. I just get a notification on the iPhone that it is "Connected" to the 2018 MacBook whenever an app on the MacBook tries to use the iPhone's camera.