Singleplayer world invites doesn't work

I've enabed "invites only" in world multiplayer settings. I clearly remember that I was able to invite my online friends earlier this year, but it doesn't seem to work anymore. When I open pause menu, tap "invite to game", check a friend and tap "send 1 invite", nothing happens on friend's side. Previously this person would see a pop-up notification at the top of the screen and was able to tap it to join my world. I also tried inviting myself from friend's world and also didn't get the notification on my end.

I made sure to check all the settings in Xbox account (there's only one setting responsible for this as far as I can tell), and everything set up properly on both ends. Clearing app data and cache, as well as reinstalling the game, does not resolve the issue.