This is the result of new way of detecting file encoding and it's incompatibility with python-file-magic package. The 6.1.2-3.fc42 package that is now on it's way to stable addresses this bug.

*** This bug has been marked as a duplicate of bug 2402682 ***

As I previously mentioned, the error persists on version 6.1.2-3.fc42.

Since upgrading to Fedora 43, I'm now on version 5.0.2-9.fc43 (which has no problems) but to test if this is fixed,
I updated to version 6.1.2-3.fc43, with no luck:

> dnf info reuse
Updating and loading repositories:
Repositories loaded.
Installed packages
Name            : reuse
Epoch           : 0
Version         : 6.1.2
Release         : 3.fc43
Architecture    : noarch
Installed size  : 2.7 MiB
Source          : reuse-6.1.2-3.fc43.src.rpm
From repository : updates-testing
Summary         : A tool for compliance with the REUSE recommendations
URL             : https://github.com/fsfe/reuse-tool
License         : Apache-2.0 AND CC0-1.0 AND CC-BY-SA-4.0 AND GPL-3.0-or-later
Description     : A tool for compliance with the REUSE recommendations. Essentially,
                : it is a linter that checks for a project's compliance, and a compiler that
                : generates a project's bill of materials.
Vendor          : Fedora Project

> reuse
Traceback (most recent call last):
  File "/usr/bin/reuse", line 5, in <module>
    from reuse.cli.main import main
  File "/usr/lib64/python3.14/site-packages/reuse/cli/__init__.py", line 7, in <module>
    from . import (
    ...<8 lines>...
    )
  File "/usr/lib64/python3.14/site-packages/reuse/cli/annotate.py", line 30, in <module>
    from .._annotate import add_header_to_file
  File "/usr/lib64/python3.14/site-packages/reuse/_annotate.py", line 34, in <module>
    from .extract import contains_reuse_info
  File "/usr/lib64/python3.14/site-packages/reuse/extract.py", line 111, in <module>
    _MAGIC = get_encoding_module().Magic(mime_encoding=True)
TypeError: Magic.__init__() got an unexpected keyword argument 'mime_encoding'

Extra package versions:

> dnf info python3-file-magic
Updating and loading repositories:
Repositories loaded.
Installed packages
Name            : python3-file-magic
Epoch           : 0
Version         : 5.46
Release         : 8.fc43
Architecture    : noarch
Installed size  : 28.5 KiB
Source          : file-5.46-8.fc43.src.rpm
From repository : fedora
Summary         : Python 3 bindings for the libmagic API
URL             : https://www.darwinsys.com/file/
License         : BSD-2-Clause-Darwin AND BSD-2-Clause
Description     : This package contains the Python 3 bindings to allow access to the
                : libmagic API. The libmagic library is also used by the familiar
                : file(1) command.
Vendor          : Fedora Project

> dnf info python3-magic
Updating and loading repositories:
Repositories loaded.
Available packages
Name           : python3-magic
Epoch          : 0
Version        : 0.4.27
Release        : 15.fc43
Architecture   : noarch
Download size  : 31.9 KiB
Installed size : 68.1 KiB
Source         : python-magic-0.4.27-15.fc43.src.rpm
Repository     : fedora
Summary        : File type identification using libmagic
URL            : https://github.com/ahupp/python-magic
License        : MIT
Description    : This module uses ctypes to access the libmagic file type identification
               : library. It makes use of the local magic database and supports both textual
               : and MIME-type output.
Vendor         : Fedora Project