Conversations involving multiple participants, allowing collaboration and information sharing in Teams
As with many Microsoft problems, I think this one is a combination.
Your version of Office is not current, but you could be in the Enterprise Semi-Annual Channel, so does not get updates as often. You can change this, I did. Mine was Semi-Annual, but I needed to get the updates before the rest of my users.
Your version of Windows is quite out of date.
My site laptop (as opposed to my regular desktop) is Windows 11. I ran all the updates I can for Windows, Office and Teams and turned on the prediction. It is working as expected.
Teams: 1.6.00.11166 (64-bit) on 2023-05-16
Office: Version 2208 (Build 15601.20660 Click-to-Run) on Sept 13, 2022 -- Semi-Annual Enterprise Channel
Windows 11: 22H2, 2023-05 Cumulative Update for Windows 11 Version 22H2 for x64-based Systems (KB5026372) on 5/09/2023
I did the Windows 11 testing as I was typing this email. Based on my findings I would guess that it may be your Windows 11 update that is still causing the issue.
Again, just a guess.