VNC Viewer for iOS 3.10.0 has been released and addresses this issue.
We are aware of an issue with our VNC Viewer app v3.9.4 on iOS/iPadOS 16 devices when paired with a Bluetooth keyboard, or using a physical keyboard such as the Apple Smart Keyboard. Our development team are working on an updated version to resolve this.
Until the new version is released, to use your physical keyboard you will need to press the keyboard icon on the VNC Viewer toolbar to display the onscreen keyboard. Physical keyboard inputs will then be recognised correctly.