SVG is pasted as image

I’ve been battling with this for a while. I’ve never encountered the issue before. I’m trying to import an SVG into Figma but whatever I do it doesn’t work.
I exported the SVG from XD, opened it in Adobe Illustrator, checked that IT IS an SVG. All paths are there, text is text etc…
I select it and paste into Figma, the result is an image. I’ve tried pasting individual elements and the result is always an image. This is after I managed to paste one icon successfully.
Why are simple things like this always the start of a headache?

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