Refresh the ostree package; this is an indirect dependency of https://bugzilla.redhat.com/show_bug.cgi?id=2032593
I installed this ostree-2022.1-2.el9 + rpm-ostree-2022.1-2.el9 and was able to successfully compose FCOS.
After evaluating this issue, there are no plans to address it further or fix it in an upcoming release. Therefore, it is being closed. If plans change such that this issue will be fixed in an upcoming release, then the bug can be reopened.