AirDrop doesn’t care that you’re using Ethernet for internet, but it absolutely relies on the Mac’s Wi-Fi interface being active for peer-to-peer networking, not just toggled on in Control Center. On Mac minis especially, Wi-Fi can be “on” but not actively participating if Location Services or wireless services got partially reset after an update.
Go to System Settings > Privacy & Security > Location Services and make sure it’s on, then open System Settings > General > AirDrop & Handoff and toggle AirDrop off and back to Contacts Only or Everyone for 10 minutes. After that, turn Wi-Fi off, wait 10 seconds, turn it back on, and do the same for Bluetooth.
The fact that the transfer starts and then fails usually means the initial discovery worked, but the peer connection dropped mid-handshake, which is classic for a stuck Wi-Fi Direct state. Firewall almost never blocks AirDrop unless “Block all incoming connections” is enabled, so I wouldn’t chase that. If this still fails, try sending one photo first, not four large ones. If a single photo works, you’re looking at a transfer reliability bug, not a pairing issue, and the workaround is annoying but real: keep Wi-Fi enabled even if you’re hardwired, or AirDrop just flakes out on newer macOS versions.