It looks like the latest XCode 12.5 on Catalina does not support iOS 14.5.1 yet...
Which XCode supports iOS 14.5.1 - the minimum version for AirTag support? Is this available for Catalina, or is one forced to upgrade to Big Sur?
Note, the beta version of XCode is not listed as available for download. Also iOS 14.5.1 is not a beta iOS.
There weren't any sizeable changes in the SDK to warrant a new Xcode release. That would make it the Xcode 12.5 betas and final release, which dropped support for Catalina.
You can see Xcode version history at: https://xcodereleases.com/