The current version of macOS Tahoe is 26.7.1. Based on your post you are running an older version, so the first step is to update your Mac to the current version.

Your Mac can support macOS 27 Golden Gate, as well.
See: Update macOS on Mac - Apple Support
Macs and iPhones have never 'paired' via Bluetooth, so even though you may see it as a device in System Settings > Bluetooth, you cannot connect that way. Bluetooth is used for features like handoff and AirDrop, but it's behind the scenes, so to speak.
To fix iPhone 17 connectivity, handoff, AirDrop, and mirroring issues, you need to refresh your Continuity and AirPlay settings and reset network configurations on both devices.
Fix iPhone Mirroring and Handoff
If iPhone Mirroring or Handoff is broken after a Tahoe update, toggling the continuity feature forces the Mac and iPhone handshake to reinitialize:
- On your iPhone, open Settings > General > AirPlay & Continuity.
- Turn off Handoff, wait a few seconds, and turn it back on.
- Check your Mac to see if the iPhone Mirroring app or option re-registers.
- Ensure both your Mac and iPhone are signed in with the same Apple Account and have both Wi-Fi and Bluetooth enabled.
Reset Network and Bluetooth Settings on iPhone
An "isn't supported" error can stem from corrupted network handshakes introduced during OS updates:
- On your iPhone, go to Settings > General > Transfer or Reset iPhone > Reset > Reset Network Settings.
- Enter your passcode to confirm. (Note: this resets saved Wi-Fi networks and Bluetooth pairings, so you will need to rejoin them).
- Restart both your Mac and your iPhone 17
I have an iPhone 14 Pro running iOS 27.0.1, and the connectivity features (Handoff, Universal Clipboard, AirDrop, etc.) work fine in both directions with my M1 Pro MBP running Tahoe 26.7.1 and my M4 Pro MBP running Golden Gate 27.0.1.