I can confirm both statements with my Xperia 10III.
On the one hand Internet sharing works fine and on the other hand internet sharing doesn’t work.
For me it is as follows:
Internet sharing works only with IPv4 mobile data connection.
Unfortunately, I can’t establish an IPv4 mobile data connection with Congstar SIM (MNO Telekom DE)
See my bugreport: IPv4 mobile data connection not possible
Therefore, internet sharing does not work with this mobile data connection.
@Cryx and @d.geelen
Maybe that’s your problem too.
Please check the protocol in access point settings.
If you have the protocol setting „Dual“, you normally should have IPv4 mobile data connection.
Try calling up an IPv4 address directly on the Xperia in the browser (Without WLAN, only mobile data connection established). E.g. https://8.8.8.8 (instead of dns.google.com).
If you can’t access the webpage, you don’t have an IPv4 mobile data connection. This is the reason, why your Internet sharing doesn´t work.
In my above mentioned bugreport, I showed already, that with my other SIM from MEDIONmobile (MNO O2 DE) I can establish an IPv4 mobile data connection.
Therefore, internet sharing works as expected with the MEDIONmobile data connection.
The problem can also be provoked with this mobile data connection by switching the protocol to IPv6. As a result, internet sharing with the MEDIONmobile data connection is no longer possible.