The problem is that you’re using a 5.0.x Unreal version, don’t you? If you update it to 5.1 or newer it will work. Nevertheless, you can also manually update the input system. I noticed it while I was following this toturial: Make a 2D Top Down Game in Unreal Engine 5 - Tutorial - YouTube
The author wrote this commentary:
"I forgot to clarify at the beginning of the video that I’m using UE 5.1 for this, so I recommend you also use UE 5.1 or newer for this!
Some viewers are having issue with 5.0.x since the enhanced input action system isn’t active by default but has to be turned on manually.
If you start on 5.0.x you can just install 5.1 after, locate your project files on your hard drive, right click on the unreal engine project and select ‘change Unreal Engine version’ to update the project to 5.1 easily.
But even if you want to stay on 5.0.x you can manually activate the enhanced input system.
Once the project is open click on Plugins in the top bar and activate ‘Enhanced Input’.
In the project settings go to Input and set the Default Classes to EnhancedPlayerInput and EnhancedInputComponent.
Delete all action and axis mappings of the old input system.
After that just follow everything as it is in the tutorial."
I hope it will help you 