Mosaic datasets cannot be used as elevation surfaces in ArcGIS Pro 3.0.

Workaround

Two major ways to avoid the scene from turning flat:

• Revert to the older version of ArcGIS Pro such as 2.9.2 or 2.9.3, where the issue is not present.
• Use ArcGIS Pro 3.0 with the following data type for elevation surface instead of a mosaic dataset.
  • A raster dataset, such as a DEM raster.
  • WorldElevation3D or Terrain3D service.

Steps to Reproduce