In Xcode 16.4 I went to my app target and typed "Icon" in the Filter box.

I had the "Primary App Icon Set Name" set to the name of my .icon file NOT AppIcon. I switched it back to "AppIcon" and it now it builds.

I don't have an Images.xcassets file. AFAIK Xcode isn't creating those now - and I didn't need to create one.