@dyp1985
Dave, all I'm able to find on your topic appears to be your own posts elsewhere. I think ensuring both devices are on 2.4 GHz is a good path to explore—you didn't clearly indicate if your failed attempts were with the iPhone 12 or 8.
I have seen your struggle first hand. I have several WiFi SSIDs in use (as my access points can broadcast sixteen separate WiFi signals). One SSID is dedicated to Nest and it's on a dedicated VLAN. I do need to ensure my phone is connected to the Nest SSID or setup fails. My Nest SSID is 2.4 GHz only. On second thought, I don't think setup in this case, but the Nest devices get programmed with the same SSID and password the phone is using. So, I need to put the phone on the SSID I want the Nest devices to use.
HOWEVER, after setup completes, I can move my phone off the Nest SSID and the app continues to work EVEN THOUGH my phone uses 5 GHz on it's normal WiFi SSID which is completely different.
Off the top of my head, I believe my router is configured to permit the Nest VLAN and my regular phone VLAN to talk to each other (but only on the ports I mention above). If I'm wrong about that—I need to re-examine the web I created to know for sure —then the phone app doesn't communicate to the Nest devices directly, and goes through the Nest servers instead. I'm pretty sure they talk locally.
My uncertainty above isn't the point I'm trying to make, however. My point is once the devices are setup, you may not have as much trouble keeping it working. So, here's what I suggest, since you've had success with the hot spot method:
TURN OFF your router. Set your hot spot to use the exact same SSID and password that your router uses. Perform the setup. If you're successful, the Nest devices will be programmed to connect to the same SSID that your router broadcasts. Now, turn off the hotspot and turn your router back on.
See if that contorted method gets you through the setup and gets that success "transferred" over to your router.
If that succeeds, you'll at least have a work-around to get the setup done. I always have setup glitches too because of the security and VLANs I've created and that makes things more complex. But, once I get it working, I don't have troubles.
My second thought involves your WiFi settings. My access points have a setting to allow or deny devices talking to each other. The "deny" configuration would be good security in an application where you might have public users or insecure users that have no business attempting to communicate with other users on the WiFi. See if your router/WiFi has any settings that look like this one. My debugging brain always starts by turning off all security or weird settings and, if that works, turn them back on one at a time to try to narrow down the problem.
Another thought is, I know setup uses Bluetooth. It's not entirely clear to me, however, if setup requires Level 2 (Ethernet packet) communications or only requires Level 3 (IP packet) communications.
Is there a WiFi/router setting on your device that sounds anything like "Allow L2 packets" or mentions L2/L3 at all, or sounds anything like that? Chromecast requires L2, and a setting that mentions enabling Chromecast is worth trying. But I'm not certain Nest setup requires L2.
Please post back what you find.
Best wishes!
Kevin