Turns out Rails 8 requires both libvips AND Imagemagick.

Re-did this tutorial from RoR site exactly as he does it. This time I got this message from console when trying to create a post with an image:

LoadError (Could not open library 'vips.so.42': vips.so.42: cannot open shared object file: No such file or directory.
Could not open library 'libvips.so.42': libvips.so.42: cannot open shared object file: No such file or directory.

RoR's Active Storage Overview says we require to install libvips v8.6+ or ImageMagick but actually we need BOTH.

Here's the article where I found out