Not even a name has been given to the feature, but here's how it operates: To isolate a person or object in a photo from their background, tap and hold on to the image.
When you release your finger from the screen, the cutout will be released from the photo and can be dragged into another app to be used in a different way, such as posting, sharing, or creating a collage.
Photos of plants, food, landmarks, and even pets can be identified with the tap-and-lift feature, which is technically a part of Visual Lookup, a feature introduced in iOS 15.