Same issue here, I have disabled VPN, Firewall, etc and still not connecting to iOS 17 device, with iOS 16 devices everything works just fine.

As I mentioned above the best solution for this problem in the mean time is to use a host-based application firewall like Little Snitch or Lulu to deny the internet access of nsurlsessiond. You just need to create a rule to deny internet access for: /Applications/Xcode.app/Contents/Developer/Platforms/iPhoneOS.platform/Library/Developer/CoreSimulator/Profiles/Runtimes/iOS.simruntime/Contents/Resources/RuntimeRoot/usr/libexec/nsurlsessiond Check this screenshot to get an idea: dropbox.com/s/rf3kzbbhsgre1on/nsurlsessiond-rule.png?dl=0

An alternative to @vinukn335 temporary solution should be to use a host-based application firewall like Little Snitch to deny the internet access of nsurlsessiond dropbox.com/s/rf3kzbbhsgre1on/nsurlsessiond-rule.png?dl=0

I also have the same problem.