Ideas
I tried reinstalling the game but it did not help. Finally I had to delete all my local save and that fixed the issue. This means that the last PS5 update for FC26 broke the save data itself. Now, while this was the workaround which worked for me and was the last resort instead of waiting for another patch to come which who knows breaks what again.
After this, I noticed another UI bug. Since I was playing using a custom team in tier 2 league of England. After the last update the custom league selection UI is broken, it auto selects the league and does not allow me to go to any other league than premier league. I can not change country and I can not change league within a country.
FC26 has to be the least stable version of the game in the recent years for this franchise.