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This for reporting @delrod. I looked into this and apparently that functionality is currently only available for Core blocks. As soon as a block from a plugin placed in the Query block, the functionality is disabled. You can see the code here.
My guess is that this is temporary. The functionality is driven by the Interactivity API, which is very new and currently only available in Core. In WordPress 6.5, the API will be opened up for general use, and I expect this limitation of plugin blocks to be removed.
Best,
Nick