I just tried it too, with the “work” Mac (Sequoia 15.6) and it works. I tried with another app because it seems the license works on up to two computers.
I just tried creating a new user, but the problem persists. I'll try on the next OS release, in the meantime I'll get by manually

Plaster sets the icon by more or less directly writing to the file system and setting the necessary attributes. This method has not been available for years.

Yate uses the published API for setting icons on files and folders. Unfortunately the API only returns that it worked or it didn't. There is no error information.

This has to be a privilege issue as it seems to be unique to your setup. In System Settings - Privacy & Security make sure that Yate is enabled in both Full Disk Access and Files & Folders. Enabling Full Disk Access should enable Files & Folders.

If your files are remote check the privilege. If not, try creating a folder which is not a system known default. ie. create a folder called Test in your user folder. Try a few files there.